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The S&P 400, also known as the S&P MidCap 400, is a stock market index that tracks the performance of mid-sized companies in the United States. It is a subset of the S&P 500, and is composed of 400 stocks from the mid-cap segment of the US equity market. The index was introduced in 1991 and is maintained by S&P Dow Jones Indices.
The S&P 400 has outperformed the broader market over the past few years. Since the start of 2020, the S&P 400 has gained 6.9%, while the S&P 500 has only gained 4.7%. This outperformance has been driven by the resilience of mid-cap companies during the pandemic. Mid-cap companies are typically less exposed to the economic cycles than large-cap companies, and have been able to weather the storm better than their larger peers.
The S&P 400 is composed of companies from 11 different sectors, including consumer discretionary, healthcare, financials, industrials, technology, and energy. This diversification has helped the index to outperform the broader market. For example, the healthcare sector has been one of the outperformers in 2020, with the S&P 400 healthcare sector gaining 17.6% year-to-date. This has been driven by the strong performance of companies such as UnitedHealth Group and CVS Health.
The S&P 400 has also benefited from the outperformance of certain individual stocks. For example, the stock of Zoom Video Communications has gained more than 200% this year, while the stock of Peloton Interactive has gained more than 400%. These stocks have been the biggest contributors to the S&P 400’s outperformance.
The S&P 400 has also outperformed the broader market due to its focus on mid-cap companies. Mid-cap companies are typically less exposed to the economic cycles than large-cap companies, and have been able to weather the storm better than their larger peers. Additionally, mid-cap companies tend to be more nimble and able to adjust to changing market conditions more quickly than larger companies.
The S&P 400 has also benefited from the recent rally in the technology sector. The technology sector has been one of the best-performing sectors in 2020, with the S&P 400 technology sector gaining more than 30% year-to-date. This has been driven by the strong performance of companies such as Microsoft, Apple, and Amazon.
Overall, the S&P 400 has outperformed the broader market over the past few years. This outperformance has been driven by the resilience of mid-cap companies during the pandemic, the outperformance of certain individual stocks, and the strong performance of the technology sector. Going forward, the S&P 400 should continue to outperform the broader market, as mid-cap companies remain resilient and the technology sector continues to rally.
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