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Should SPDR S&P 400 Mid Cap Growth ETF (MDYG) Be on Your Investing Radar?
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Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the SPDR S&P 400 Mid Cap Growth ETF (MDYG - Free Report) , 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 $2.03 billion, making it one of the larger ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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 they have a nice balance of growth potential and stability.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.78%.
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 19.60% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Targa Resources Corp. (TRGP - Free Report) accounts for about 1.54% of total assets, followed by Carlisle Companies Incorporated (CSL - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .
The top 10 holdings account for about 12.12% of total assets under management.
Performance and Risk
MDYG seeks to match the performance of the S&P MidCap 400 Growth Index before fees and expenses. The S&P MidCap 400 Growth Index measures the performance of the mid-capitalization growth sector in the U.S. equity market.
The ETF has lost about -16.53% so far this year and is down about -18.04% in the last one year (as of 11/22/2022). In the past 52-week period, it has traded between $59.32 and $82.18.
The ETF has a beta of 1.08 and standard deviation of 29.11% for the trailing three-year period, making it a medium risk choice in the space. With about 234 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid Cap Growth 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, MDYG is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap Growth ETF (VOT - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $9.66 billion in assets, iShares Russell MidCap Growth ETF has $11.92 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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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Should SPDR S&P 400 Mid Cap Growth ETF (MDYG) Be on Your Investing Radar?
Looking for broad exposure to the Mid Cap Growth segment of the US equity market? You should consider the SPDR S&P 400 Mid Cap Growth ETF (MDYG - Free Report) , 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 $2.03 billion, making it one of the larger ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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 they have a nice balance of growth potential and stability.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.78%.
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 19.60% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Targa Resources Corp. (TRGP - Free Report) accounts for about 1.54% of total assets, followed by Carlisle Companies Incorporated (CSL - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .
The top 10 holdings account for about 12.12% of total assets under management.
Performance and Risk
MDYG seeks to match the performance of the S&P MidCap 400 Growth Index before fees and expenses. The S&P MidCap 400 Growth Index measures the performance of the mid-capitalization growth sector in the U.S. equity market.
The ETF has lost about -16.53% so far this year and is down about -18.04% in the last one year (as of 11/22/2022). In the past 52-week period, it has traded between $59.32 and $82.18.
The ETF has a beta of 1.08 and standard deviation of 29.11% for the trailing three-year period, making it a medium risk choice in the space. With about 234 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid Cap Growth 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, MDYG is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap Growth ETF (VOT - Free Report) and the iShares Russell MidCap Growth ETF (IWP - Free Report) track a similar index. While Vanguard MidCap Growth ETF has $9.66 billion in assets, iShares Russell MidCap Growth ETF has $11.92 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.