Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the SPDR Portfolio S&P 400 Mid Cap ETF (
SPMD Quick Quote SPMD - 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 $4.58 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
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, companies that fall under this category provide a stable and growth-heavy investment.
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.
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 1.15%.
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 18.10% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Bio-Techne Corporation (
TECH Quick Quote TECH - Free Report) accounts for about 0.74% of total assets, followed by Molina Healthcare Inc. ( MOH Quick Quote MOH - Free Report) and Cognex Corporation ( CGNX Quick Quote CGNX - Free Report) .
The top 10 holdings account for about 6.13% 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 gained about 19.37% so far this year and was up about 39.23% in the last one year (as of 08/18/2021). In the past 52-week period, it has traded between $31.41 and $48.58.
The ETF has a beta of 1.19 and standard deviation of 27.32% for the trailing three-year period. With about 404 holdings, it effectively diversifies company-specific risk.
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 Quick Quote VO - Free Report) and the iShares Core S&P MidCap ETF ( IJH Quick Quote IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $50.92 billion in assets, iShares Core S&P MidCap ETF has $62.79 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%. Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.