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Should SPDR S&P MidCap 400 ETF (MDY) Be on Your Investing Radar?
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The SPDR S&P MidCap 400 ETF (MDY - Free Report) was launched on 05/04/1995, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $18.58 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
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. 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
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 0.22%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.28%.
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 Industrials sector--about 19.80% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Carlisle Companies Incorporated (CSL - Free Report) accounts for about 0.74% of total assets, followed by Targa Resources Corp. (TRGP - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .
The top 10 holdings account for about 6.24% of total assets under management.
Performance and Risk
MDY seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index is composed of 400 selected stocks listed on national stock exchanges, and spans a broad range of major industry groups.
The ETF has lost about -10.68% so far this year and is down about -11.29% in the last one year (as of 11/11/2022). In the past 52-week period, it has traded between $401.58 and $531.03.
The ETF has a beta of 1.12 and standard deviation of 29.64% for the trailing three-year period, making it a medium risk choice in the space. With about 402 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P MidCap 400 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MDY is a reasonable option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap ETF (VO - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $50.91 billion in assets, iShares Core S&P MidCap ETF has $64.54 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.
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Should SPDR S&P MidCap 400 ETF (MDY) Be on Your Investing Radar?
The SPDR S&P MidCap 400 ETF (MDY - Free Report) was launched on 05/04/1995, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $18.58 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
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. 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
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 0.22%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.28%.
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 Industrials sector--about 19.80% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Carlisle Companies Incorporated (CSL - Free Report) accounts for about 0.74% of total assets, followed by Targa Resources Corp. (TRGP - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .
The top 10 holdings account for about 6.24% of total assets under management.
Performance and Risk
MDY seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index is composed of 400 selected stocks listed on national stock exchanges, and spans a broad range of major industry groups.
The ETF has lost about -10.68% so far this year and is down about -11.29% in the last one year (as of 11/11/2022). In the past 52-week period, it has traded between $401.58 and $531.03.
The ETF has a beta of 1.12 and standard deviation of 29.64% for the trailing three-year period, making it a medium risk choice in the space. With about 402 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P MidCap 400 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MDY is a reasonable option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap ETF (VO - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $50.91 billion in assets, iShares Core S&P MidCap ETF has $64.54 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.