After an unusually good year for US equities in 2023, concerns about high valuations and concentration risk for U.S. equity indices, such as the S&P 500® Index, have led some financial professionals to seek  potentially better opportunities among small- and mid-capitalization ("SMid-cap") stocks.  However, fears that an economic recession could be on the horizon have led some to shy away from tilting portfolio allocations towards smaller companies.  Below, we discuss these issues, highlighting why we believe that SMid-cap stocks may offer an attractive opportunity, but also why selectivity may be critical for navigating the current market environment.  We then discuss why we believe those seeking to increase allocations to SMid-cap stocks should consider the First Trust SMID Cap Rising Dividend Achievers ETF (SDVY).

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