Bank of America Investment Advisors, Chicago, has begun offering a midcapitalization quantitative separate account.
The firm just ended a three-year trial in which its quant-based midcap style outperformed the Standard & Poor's MidCap 400 Index by 250 basis points on an annualized basis, said Daniel Cardell, senior vice president and director of equities.
Mr. Cardell said the midcap market is ripe for a quantitative approach. It's a less efficient area of the market with less analyst coverage and less money going into it than the stocks in the popular S&P 500. There are other reasons to buy midcap stocks, he said. If indexing midcap stocks takes hold like it has in the S&P 500, midcap stocks should get a boost, Mr. Cardell said.
Bank of America manages about $120 million in assets in the midcap style for high net worth clients and in some 401(k) plans. Now the firm will begin offering it to outside institutional clients, Mr. Cardell said.
