Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the SPDR S&P 600 Small Cap Value ETF (
SLYV Quick Quote SLYV - Free Report) is 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 $3.91 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
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have 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.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 1.92%.
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 Financials sector--about 22.20% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Helmerich & Payne Inc. (
HP Quick Quote HP - Free Report) accounts for about 0.98% of total assets, followed by South Jersey Industries Inc. ( SJI Quick Quote SJI - Free Report) and Patterson-Uti Energy Inc. ( PTEN Quick Quote PTEN - Free Report) .
The top 10 holdings account for about 7.26% 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 lost about -13.20% so far this year and is down about -8.34% in the last one year (as of 09/08/2022). In the past 52-week period, it has traded between $70.38 and $90.28.
The ETF has a beta of 1.15 and standard deviation of 32.14% for the trailing three-year period, making it a medium risk choice in the space. With about 464 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 $12.01 billion in assets, Vanguard SmallCap Value ETF has $23.09 billion. IWN has an expense ratio of 0.23% and VBR charges 0.07%. 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.