Opportunities in U.S. mid-cap equities

Mid-cap companies can offer the higher growth potential of smaller companies, with the strength and stability generally offered by larger companies. Similar to small-cap companies, mid-cap companies often have an entrepreneurial approach to doing business and, because of their size, are able to respond swiftly to change and capitalize on unfolding opportunities more readily than large-cap companies. They tend to have stronger balance sheets and have often weathered many of the growing pains that can disrupt small-cap companies. With proven management teams and well established products, mid caps may even be globally diversified – similar to large-cap companies. However, unlike their large-cap peers, mid-cap firms are not usually tempted to engage in dilutive acquisitions, which could potentially decrease the company's earnings per share, to boost their growth rates. Thus, in our view, mid-cap stocks offer an excellent balance between strong growth and a demonstrable history of management success.