Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the SPDR Portfolio S&P 600 Small Cap ETF (
SPSM Quick Quote SPSM - Free Report) , a passively managed exchange traded fund launched on 07/08/2013.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $4.50 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
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.
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 1.16%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 18.60% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Macy's Inc (
M Quick Quote M - Free Report) accounts for about 0.82% of total assets, followed by Omnicell Inc. ( OMCL Quick Quote OMCL - Free Report) and Chart Industries Inc. ( GTLS Quick Quote GTLS - Free Report) .
The top 10 holdings account for about 5.41% of total assets under management.
Performance and Risk
SPSM seeks to match the performance of the Russell 2000 Index before fees and expenses. The Russell 2000 Index measures the performance of the small-cap segment of the US equity market.
The ETF has added about 25.65% so far this year and is up roughly 27.23% in the last one year (as of 12/13/2021). In the past 52-week period, it has traded between $34.77 and $46.94.
The ETF has a beta of 1.18 and standard deviation of 29.63% for the trailing three-year period. With about 616 holdings, it effectively diversifies company-specific risk.
SPDR Portfolio S&P 600 Small 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, SPSM is a great option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (
IWM Quick Quote IWM - Free Report) and the iShares Core S&P SmallCap ETF ( IJR Quick Quote IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $68.05 billion in assets, iShares Core S&P SmallCap ETF has $72.88 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%. 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.