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Should SPDR S&P 400 Mid Cap Growth ETF (MDYG) Be on Your Investing Radar?
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Launched on 11/08/2005, the SPDR S&P 400 Mid Cap Growth ETF (MDYG - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.66 billion, making it one of the larger ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.19%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 21.60% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Steel Dynamics Inc. (STLD - Free Report) accounts for about 1.85% of total assets, followed by Carlisle Companies Incorporated (CSL - Free Report) and Neurocrine Biosciences Inc. (NBIX - Free Report) .
The top 10 holdings account for about 11.54% of total assets under management.
Performance and Risk
MDYG seeks to match the performance of the S&P MidCap 400 Growth Index before fees and expenses. The S&P MidCap 400 Growth Index measures the performance of the mid-capitalization growth sector in the U.S. equity market.
The ETF has gained about 2.97% so far this year and is down about -11.41% in the last one year (as of 03/30/2023). In the past 52-week period, it has traded between $59.32 and $74.72.
The ETF has a beta of 1.08 and standard deviation of 24.31% for the trailing three-year period, making it a medium risk choice in the space. With about 237 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid Cap Growth 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, MDYG is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $9.86 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.76 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.
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Should SPDR S&P 400 Mid Cap Growth ETF (MDYG) Be on Your Investing Radar?
Launched on 11/08/2005, the SPDR S&P 400 Mid Cap Growth ETF (MDYG - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Growth segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.66 billion, making it one of the larger ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
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 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.19%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 21.60% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Steel Dynamics Inc. (STLD - Free Report) accounts for about 1.85% of total assets, followed by Carlisle Companies Incorporated (CSL - Free Report) and Neurocrine Biosciences Inc. (NBIX - Free Report) .
The top 10 holdings account for about 11.54% of total assets under management.
Performance and Risk
MDYG seeks to match the performance of the S&P MidCap 400 Growth Index before fees and expenses. The S&P MidCap 400 Growth Index measures the performance of the mid-capitalization growth sector in the U.S. equity market.
The ETF has gained about 2.97% so far this year and is down about -11.41% in the last one year (as of 03/30/2023). In the past 52-week period, it has traded between $59.32 and $74.72.
The ETF has a beta of 1.08 and standard deviation of 24.31% for the trailing three-year period, making it a medium risk choice in the space. With about 237 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid Cap Growth 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, MDYG is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $9.86 billion in assets, iShares Russell Mid-Cap Growth ETF has $11.76 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.