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Should SPDR S&P 600 Small Cap Growth ETF (SLYG) Be on Your Investing Radar?
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The SPDR S&P 600 Small Cap Growth ETF (SLYG - Free Report) was launched on 09/25/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Growth segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $2.28 billion, making it one of the larger ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
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 1.30%.
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 19.40% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Ensign Group Inc. (ENSG - Free Report) accounts for about 1.21% of total assets, followed by Sps Commerce Inc. (SPSC - Free Report) and Rambus Inc. (RMBS - Free Report) .
The top 10 holdings account for about 10.4% of total assets under management.
Performance and Risk
SLYG seeks to match the performance of the S&P SmallCap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index measures the performance of the small-capitalization growth 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 -1.92% so far this year and is down about -1.80% in the last one year (as of 05/10/2023). In the past 52-week period, it has traded between $67.45 and $82.50.
The ETF has a beta of 1.12 and standard deviation of 24.64% for the trailing three-year period, making it a medium risk choice in the space. With about 342 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 600 Small Cap Growth 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, SLYG is a reasonable option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard Small-Cap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $9.26 billion in assets, Vanguard Small-Cap Growth ETF has $13.05 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.
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Should SPDR S&P 600 Small Cap Growth ETF (SLYG) Be on Your Investing Radar?
The SPDR S&P 600 Small Cap Growth ETF (SLYG - Free Report) was launched on 09/25/2000, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Growth segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $2.28 billion, making it one of the larger ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
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 1.30%.
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 19.40% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Ensign Group Inc. (ENSG - Free Report) accounts for about 1.21% of total assets, followed by Sps Commerce Inc. (SPSC - Free Report) and Rambus Inc. (RMBS - Free Report) .
The top 10 holdings account for about 10.4% of total assets under management.
Performance and Risk
SLYG seeks to match the performance of the S&P SmallCap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index measures the performance of the small-capitalization growth 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 -1.92% so far this year and is down about -1.80% in the last one year (as of 05/10/2023). In the past 52-week period, it has traded between $67.45 and $82.50.
The ETF has a beta of 1.12 and standard deviation of 24.64% for the trailing three-year period, making it a medium risk choice in the space. With about 342 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 600 Small Cap Growth 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, SLYG is a reasonable option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Growth ETF (IWO - Free Report) and the Vanguard Small-Cap Growth ETF (VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $9.26 billion in assets, Vanguard Small-Cap Growth ETF has $13.05 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.