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Should SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) Be on Your Investing Radar?

Style Box ETF report for SPMD

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This story originally appeared on Zacks

The SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.

- Zacks

The fund is sponsored by State Street Global Advisors. It has amassed assets over $4.69 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.

Why Mid Cap Blend

Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.05%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.44%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 17.70% of the portfolio. Financials and Consumer Discretionary round out the top three.

Looking at individual holdings, Bio-Techne Corporation (TECH) accounts for about 0.74% of total assets, followed by Molina Healthcare Inc. (MOH) and Cognex Corporation (CGNX).

The top 10 holdings account for about 6.13% of total assets under management.

Performance and Risk

SPMD seeks to match the performance of the S&P 1000 Index before fees and expenses. The S&P 1000 Index combines the S&P MidCap 400 and the S&P SmallCap 600 to form an investable benchmark for the mid to small cap segment of the U.S. equity market.

The ETF return is roughly 20.14% so far this year and is up about 38.72% in the last one year (as of 10/08/2021). In the past 52-week period, it has traded between $33.24 and $48.67.

The ETF has a beta of 1.18 and standard deviation of 27.43% for the trailing three-year period. With about 404 holdings, it effectively diversifies company-specific risk.

Alternatives

SPDR Portfolio S&P 400 Mid Cap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPMD is a great option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard MidCap ETF (VO) and the iShares Core S&P MidCap ETF (IJH) track a similar index. While Vanguard MidCap ETF has $51.80 billion in assets, iShares Core S&P MidCap ETF has $63.51 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.



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SPDR Portfolio S&P 400 Mid Cap ETF (SPMD): ETF Research Reports

 

Molina Healthcare, Inc (MOH): Free Stock Analysis Report

 

Cognex Corporation (CGNX): Free Stock Analysis Report

 

BioTechne Corp (TECH): Free Stock Analysis Report

 

iShares Core S&P MidCap ETF (IJH): ETF Research Reports

 

Vanguard MidCap ETF (VO): ETF Research Reports

 

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