Subscribe to Entrepreneur for $5
Subscribe

Should SPDR Portfolio S&P 500 Growth ETF (SPYG) Be on Your Investing Radar?

Style Box ETF report for SPYG

By
This story originally appeared on Zacks

Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the SPDR Portfolio S&P 500 Growth ETF (SPYG) is a passively managed exchange traded fund launched on 09/25/2000.

- Zacks

The fund is sponsored by State Street Global Advisors. It has amassed assets over $14.18 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.67%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 41.40% of the portfolio. Consumer Discretionary and Telecom round out the top three.

Looking at individual holdings, Apple Inc. (AAPL) accounts for about 11.25% of total assets, followed by Microsoft Corporation (MSFT) and Amazon.com Inc. (AMZN).

The top 10 holdings account for about 50.15% of total assets under management.

Performance and Risk

SPYG seeks to match the performance of the S&P 500 Growth Index before fees and expenses. The S&P 500 Growth Index measures the performance of the large-capitalization growth sector in the U.S. equity market.

The ETF has added roughly 26.18% so far this year and is up about 36.24% in the last one year (as of 10/27/2021). In the past 52-week period, it has traded between $48.59 and $68.45.

The ETF has a beta of 0.98 and standard deviation of 23.89% for the trailing three-year period, making it a medium risk choice in the space. With about 241 holdings, it effectively diversifies company-specific risk.

Alternatives

SPDR Portfolio S&P 500 Growth 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, SPYG is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $86.87 billion in assets, Invesco QQQ has $195.49 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

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.



Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.

Get it free >>



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

SPDR Portfolio S&P 500 Growth ETF (SPYG): ETF Research Reports

 

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

 

Apple Inc. (AAPL): Free Stock Analysis Report

 

Microsoft Corporation (MSFT): Free Stock Analysis Report

 

Invesco QQQ (QQQ): ETF Research Reports

 

Vanguard Growth ETF (VUG): ETF Research Reports

 

To read this article on Zacks.com click here.

 

Zacks Investment Research