Is the MDY Midcap 400 SPDR too narrow?

[number5858]

I am finding it difficult to replicate the PP exactly as I would like inside my 401K due to lack of the right choices. Do you think that the MDY Midcap 400 SPDR would be sufficiently broad to represent the broad stock index that the PP calls for?

[Pointedstick]

I wouldn't lose sleep over it, personally.

[KevinW]

I haven't analyzed this or anything, but off the cuff I would say that yes, a broad mid-cap index will track the total stock market closely enough to work. A large-cap or total-market index would be better of course.

[Ad Orientem]

It's not a bad choice. But it's not ideal. I would stick with TSM or S&P 500.

[Reub]

MDY would probably do worse in a down market.

[gap]

MDY would probably do worse in a down market.

I do not believe that is true - at least that did not happen in the 2008 collapse or the 2011 correction.
In 2008 MDY recovered much faster while in 2011 SPY recovered faster although MDY caught up and exceeded SPY eventually.

So it is hard say that either one is better without more data. For the time being I wouldn't lose sleep over it, as Pointedstick remarked earlier

[Ad Orientem]

One reason I prefer TSM or the S&P 500 is that it gives you some of the bigger companies that have a lot of their fingers in international and emerging markets. I'm not sure you would get the same level of exposure with MDY.