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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

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.

- Zacks

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.

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 0.05%, 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.

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 $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%.

Bottom-Line

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.



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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

 

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