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Should SPDR S&P 600 Small Cap ETF (SLY) Be on Your Investing Radar?
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Launched on 11/08/2005, the SPDR S&P 600 Small Cap ETF is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.71 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.52%.
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 Financials sector--about 18.70% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Macy's Inc (M - Free Report) accounts for about 0.82% of total assets, followed by Omnicell Inc. (OMCL - Free Report) and Chart Industries Inc. (GTLS - Free Report) .
The top 10 holdings account for about 5.89% of total assets under management.
Performance and Risk
SLY seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index measures the performance of the small-capitalization sector in the US equity market.
The ETF has lost about -9.35% so far this year and is up roughly 6.78% in the last one year (as of 01/24/2022). In the past 52-week period, it has traded between $84.47 and $104.37.
The ETF has a beta of 1.19 and standard deviation of 29.34% for the trailing three-year period, making it a medium risk choice in the space. With about 605 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR 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, SLY is an excellent 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 - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $59.52 billion in assets, iShares Core S&P SmallCap ETF has $69.71 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 600 Small Cap ETF (SLY) Be on Your Investing Radar?
Launched on 11/08/2005, the SPDR S&P 600 Small Cap ETF is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.71 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.52%.
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 Financials sector--about 18.70% of the portfolio. Industrials and Information Technology round out the top three.
Looking at individual holdings, Macy's Inc (M - Free Report) accounts for about 0.82% of total assets, followed by Omnicell Inc. (OMCL - Free Report) and Chart Industries Inc. (GTLS - Free Report) .
The top 10 holdings account for about 5.89% of total assets under management.
Performance and Risk
SLY seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index measures the performance of the small-capitalization sector in the US equity market.
The ETF has lost about -9.35% so far this year and is up roughly 6.78% in the last one year (as of 01/24/2022). In the past 52-week period, it has traded between $84.47 and $104.37.
The ETF has a beta of 1.19 and standard deviation of 29.34% for the trailing three-year period, making it a medium risk choice in the space. With about 605 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR 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, SLY is an excellent 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 - Free Report) and the iShares Core S&P SmallCap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $59.52 billion in assets, iShares Core S&P SmallCap ETF has $69.71 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.