If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the SPDR S&P 600 Small Cap Value ETF (
SLYV Quick Quote SLYV - Free Report) , a passively managed exchange traded fund launched on 09/25/2000.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $4.33 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
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 1.93%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 24.90% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Macy's Inc (
M Quick Quote M - Free Report) accounts for about 1.52% of total assets, followed by Pdc Energy Inc. ( PDCE Quick Quote PDCE - Free Report) and Signet Jewelers Limited ( SIG Quick Quote SIG - Free Report) .
The top 10 holdings account for about 8.14% of total assets under management.
Performance and Risk
SLYV seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index measures the performance of the small-capitalization value sector in the U.S. equity market. The selection universe for the S&P SmallCap 600 Index includes all U.S. common equities listed on the NYSE, NASDAQ Global Select Market, NASDAQ Select Market and NASDAQ Capital Market with market capitalizations between $250 million and $1.2 billion.
The ETF has added roughly 32.64% so far this year and was up about 32.92% in the last one year (as of 12/30/2021). In the past 52-week period, it has traded between $65.44 and $90.28.
The ETF has a beta of 1.25 and standard deviation of 31.47% for the trailing three-year period, making it a medium risk choice in the space. With about 479 holdings, it effectively diversifies company-specific risk.
SPDR S&P 600 Small Cap Value 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, SLYV is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (
IWN Quick Quote IWN - Free Report) and the Vanguard SmallCap Value ETF ( VBR Quick Quote VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $15.96 billion in assets, Vanguard SmallCap Value ETF has $26.67 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%. 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.