The SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Blend segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $7.99 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.03%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.48%.
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 Industrials sector--about 22.60% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Jabil Inc (JBL) accounts for about 0.81% of total assets, followed by Hubbell Inc (HUBB) and Reliance Steel + Aluminum (RS).
The top 10 holdings account for about 6.34% of total assets under management.
Performance and Risk
SPMD seeks to match the performance of the S&P 1000 Index before fees and expenses. The S&P MidCap 400 Index combines the S&P MidCap 400 and the S&P SmallCap 600 to form an investable benchmark for the mid to small cap segment of the U.S. equity market.
The ETF has lost about -0.31% so far this year and it's up approximately 15.97% in the last one year (as of 01/03/2024). In the past 52-week period, it has traded between $40.76 and $49.20.
The ETF has a beta of 1.13 and standard deviation of 20.71% for the trailing three-year period. With about 403 holdings, it effectively diversifies company-specific risk.
SPDR Portfolio S&P 400 Mid 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, SPMD is an excellent option for investors seeking exposure to the Style Box - Mid Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $58.59 billion in assets, iShares Core S&P Mid-Cap ETF has $76.31 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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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