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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 $18.30 billion, making it one of the largest 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.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.23%, 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
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 22.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, U.s. Dollar (CASH_USD) accounts for about 0.93% of total assets, followed by Jabil Inc. (JBL - Free Report) and Hubbell Incorporated (HUBB - Free Report) .
The top 10 holdings account for about 6.66% 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 added about 5.69% so far this year and it's up approximately 3.16% in the last one year (as of 11/20/2023). In the past 52-week period, it has traded between $425.08 and $498.33.
The ETF has a beta of 1.13 and standard deviation of 20.78% 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 good 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 Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $53.93 billion in assets, iShares Core S&P Mid-Cap ETF has $70.96 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 $18.30 billion, making it one of the largest 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.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.23%, 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
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. 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 22.50% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, U.s. Dollar (CASH_USD) accounts for about 0.93% of total assets, followed by Jabil Inc. (JBL - Free Report) and Hubbell Incorporated (HUBB - Free Report) .
The top 10 holdings account for about 6.66% 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 added about 5.69% so far this year and it's up approximately 3.16% in the last one year (as of 11/20/2023). In the past 52-week period, it has traded between $425.08 and $498.33.
The ETF has a beta of 1.13 and standard deviation of 20.78% 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 good 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 Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $53.93 billion in assets, iShares Core S&P Mid-Cap ETF has $70.96 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.