Should SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) Be on Your Investing Radar?
Style Box ETF report for SPMD
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) is a passively managed exchange traded fund launched on 11/08/2005.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $5.44 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 have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.05%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.38%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 19.30% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Solaredge Technologies Inc. (SEDG) accounts for about 0.76% of total assets, followed by Signature Bank (SBNY) and Molina Healthcare Inc. (MOH).
The top 10 holdings account for about 6.52% 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 has added about 24.71% so far this year and is up about 26.59% in the last one year (as of 12/08/2021). In the past 52-week period, it has traded between $39.30 and $50.95.
The ETF has a beta of 1.16 and standard deviation of 27.24% for the trailing three-year period. With about 402 holdings, it effectively diversifies company-specific risk.
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 $55.14 billion in assets, iShares Core S&P MidCap ETF has $66.80 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>
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 400 Mid Cap ETF (SPMD): ETF Research Reports
Molina Healthcare, Inc (MOH): Free Stock Analysis Report
Signature Bank (SBNY): Free Stock Analysis Report
SolarEdge Technologies, Inc. (SEDG): Free Stock Analysis Report
iShares Core S&P MidCap ETF (IJH): ETF Research Reports
Vanguard MidCap ETF (VO): ETF Research Reports
To read this article on Zacks.com click here.