Send me real-time posts from this site at my email
Zacks

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

If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the SPDR Portfolio S&P 400 Mid Cap ETF (SPMD), 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 $5.42 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. Thus they have a nice balance of growth potential and stability.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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

It has a 12-month trailing dividend yield of 1.45%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 18.40% of the portfolio. Financials and Consumer Discretionary round out the top three.

Looking at individual holdings, Targa Resources Corp. (TRGP) accounts for about 0.70% of total assets, followed by Carlisle Companies Incorporated (CSL) and Steel Dynamics Inc. (STLD).

The top 10 holdings account for about 5.83% 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 MidCap 400 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 lost about -7.49% so far this year and is down about -3.10% in the last one year (as of 08/15/2022). In the past 52-week period, it has traded between $38.67 and $50.95.

The ETF has a beta of 1.13 and standard deviation of 28.60% for the trailing three-year period. With about 403 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 an excellent 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 $53.33 billion in assets, iShares Core S&P MidCap ETF has $65.59 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.


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 400 Mid Cap ETF (SPMD): ETF Research Reports
 
Steel Dynamics, Inc. (STLD): Free Stock Analysis Report
 
Carlisle Companies Incorporated (CSL): Free Stock Analysis Report
 
Targa Resources, Inc. (TRGP): 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.

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue