Friday, March 29, 2013

Historical Returns for the S&P 400 Midcap Index (Updated Through 2012)

The S&P 400 Midcap Index is the most widely-followed U.S. Midcap stock market index.  This index was first introduced in June 1991.  I have previously posted charts with annual returns through 2007, 2008, 2009, 2010, and 2011. The chart below shows calendar-year returns between 1992 and 2012 (click on the chart for a larger view).  The chart below also shows five-year annualized returns, starting with the fifth full calendar year of the existence of the S&P 400 Midcap Index (i.e., 1996),  ten-year annualized returns, and fifteen-year annualized returns.

As illustrated, the S&P 400 Midcap Index rebounded in 2012 from a down year in 2011, rising about 17.88%.  The annualized return of the Index from 1992-2012 was about 11.28%, the 5-year annualized return through 2012 was about 5.15%, the 10-year annualized return through 2012 were about 10.53%, and the 15-year annualized return were about 9.14%. The total return (including reinvested dividends) between December 31, 1991 and December 31, 2012 was about 842.87%.

I am a fan of midcap stocks and recommend that any long-term investor seriously consider investing money in midcap stocks, such as those tracking the S&P 400 Midcap Index (e.g., the Midcap SPDR ETF (symbol: MDY) tracks the S&P 400 Midcap Index). Midcaps tend to provide higher returns over time than large cap stocks, such as those comprising the S&P 500 Index, although such stocks are generally more volatile over shorter time periods.

** I have posted an updated chart for the period between 1992-2014.


Anonymous said...

Jim, thanks for the interesting data. One question though; if you run a chart for say MDY on Yahoo Finance for the year of 2012 it shows about 15% return vs. the nearly 18% you listed. I am trying to figure the difference. -DREW

Jim said...

You need to account for the dividends paid by the index, which are not reflected in the chart for MDY. MDY ended 2012 at $185.71 and ended 2011 at $159.49. So on the price alone, MDY increased 16.44% in 2012. However, Yahoo Finance shows that on a dividend-adjusted basis, MDY rose from $156.69 to $184.61 at the end of 2012, a gain of about 17.82%. The difference between the total return of MDY and the total return of the S&P 400 Index is due to index tracking errors and/or the expense ratio of MDY.