Mid-cap stocks, or those companies with market values ranging from $2 billion to $10 billion, can go overlooked by investors. Many investors allocate significant portions of their equity portfolios to large-cap stocks, and when they hunt for growth with smaller companies, the tendency is to skip over mid caps in favor of small caps.

Those biases are reflected in the world of exchange-traded funds (ETFs), where the population of mid-cap funds is dwarfed by large- and small-cap counterparts. One of the more venerable and best-performing mid-cap ETFs over the long term is a smart beta product – the WisdomTree U.S. MidCap Dividend Fund (DON). (See also: Finding the Right Size With Mid-Cap ETFs.)

While some competitors have since arrived on the scene, DON is the original mid-cap dividend ETF, having debuted over 11 years ago. DON's trailing-12-month dividend yield of 2.4% is higher than that of the S&P 500 and more than double the dividend yield on the widely followed S&P MidCap 400 Index.

DON is up about 7% year to date, placing it among the many mid-cap ETFs that are trailing large- and small-cap funds. However, historical data suggest that mid-cap laggard status usually is not a long-running theme. Actually, the opposite is usually true. Over long holding periods, mid-cap stocks usually outperform their large-cap counterparts while being noticeably less volatile than smaller stocks. (See also: How to Analyze Mid-Cap Stocks.)

"With everyone looking at factor research these days, it's important to note that there is not yet any long-term data supporting the longer-term potential of more expensive or more speculative stocks," said WisdomTree in a recent note. "It's important to understand that the first eight months of 2017 represent something we've seen before (and likely will again), but WisdomTree's longer-term track record in U.S. mid caps was still strong enough to deliver compelling performance over its full historical record."

At the sector level, DON is more of a value play than a growth play. The ETF allocates about half its combined weight to the consumer discretionary, real estate and industrial sectors. Those sectors combine for one-third of the S&P MidCap 400 Value Index. Utilities and materials names combine for 22.5% of DON.

Over the past three years, DON has outperformed the S&P MidCap 400 by over 100 basis points while sporting a better compound annual growth rate (CAGR). Dividends in the mid-cap space also present investors with a significant volatility advantage. Over the past three years, DON's maximum drawdown was 13.6%, or nearly 600 basis points less than the S&P MidCap 400. (See also: A Dynamic Dividend ETF for Overlooked Stocks.)

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