We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should SPDR S&P MidCap 400 ETF (MDY) Be on Your Investing Radar?
Read MoreHide Full Article
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the SPDR S&P MidCap 400 ETF (MDY - Free Report) is a passively managed exchange traded fund launched on 05/04/1995.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $21.81 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 have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. These types of companies, then, have a good balance of stability and growth potential.
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.
Costs
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 0.23%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.96%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 19.10% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Solaredge Technologies Inc. (SEDG - Free Report) accounts for about 0.75% of total assets, followed by Signature Bank (SBNY - Free Report) and Molina Healthcare Inc. (MOH - Free Report) .
The top 10 holdings account for about 6.51% 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 return is roughly 26% so far this year and was up about 23.49% in the last one year (as of 12/28/2021). In the past 52-week period, it has traded between $413.34 and $531.03.
The ETF has a beta of 1.16 and standard deviation of 27.26% for the trailing three-year period, making it a medium risk choice in the space. With about 401 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 sufficient 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 $56.76 billion in assets, iShares Core S&P MidCap ETF has $67.94 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should SPDR S&P MidCap 400 ETF (MDY) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the SPDR S&P MidCap 400 ETF (MDY - Free Report) is a passively managed exchange traded fund launched on 05/04/1995.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $21.81 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 have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. These types of companies, then, have a good balance of stability and growth potential.
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.
Costs
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 0.23%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.96%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 19.10% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Solaredge Technologies Inc. (SEDG - Free Report) accounts for about 0.75% of total assets, followed by Signature Bank (SBNY - Free Report) and Molina Healthcare Inc. (MOH - Free Report) .
The top 10 holdings account for about 6.51% 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 return is roughly 26% so far this year and was up about 23.49% in the last one year (as of 12/28/2021). In the past 52-week period, it has traded between $413.34 and $531.03.
The ETF has a beta of 1.16 and standard deviation of 27.26% for the trailing three-year period, making it a medium risk choice in the space. With about 401 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 sufficient 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 $56.76 billion in assets, iShares Core S&P MidCap ETF has $67.94 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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.