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 $3.57 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 have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
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 least expensive products in the space.
It has a 12-month trailing dividend yield of 1.98%.
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 Consumer Discretionary sector--about 20.30% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Dxc Technology Co (
DXC Quick Quote DXC - Free Report) accounts for about 0.92% of total assets, followed by Insight Enterprises Inc ( NSIT Quick Quote NSIT - Free Report) and Meritage Homes Corp ( MTH Quick Quote MTH - Free Report) .
The top 10 holdings account for about 7.78% 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 0.51% so far this year and is down about -5.20% in the last one year (as of 11/24/2023). In the past 52-week period, it has traded between $66.67 and $86.64.
The ETF has a beta of 1.19 and standard deviation of 22.80% for the trailing three-year period, making it a medium risk choice in the space. With about 462 holdings, it effectively diversifies company-specific risk.
SPDR S&P 600 Small Cap Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SLYV is a great 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 Small-Cap Value ETF ( VBR Quick Quote VBR - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $10.75 billion in assets, Vanguard Small-Cap Value ETF has $24.39 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%. 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.