Launched on 11/08/2005, the SPDR Portfolio S&P 400 Mid Cap ETF (SPMD) is a passively managed exchange traded fund designed to provide a 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 $4.87 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
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don’t, including less risk and higher growth opportunities. 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 0.05%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.51%.
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 18.40% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Camden Property Trust (CPT) accounts for about 0.75% of total assets, followed by Targa Resources Corp. (TRGP) and Alcoa Corporation (AA).
The top 10 holdings account for about 6.11% 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 -15.18% so far this year and is down about -10.72% in the last one year (as of 06/13/2022). In the past 52-week period, it has traded between $41.13 and $50.95.
The ETF has a beta of 1.12 and standard deviation of 28.15% for the trailing three-year period. With about 402 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 a great 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 MidCap ETF (VO) and the iShares Core S&P MidCap ETF (IJH) track a similar index. While Vanguard MidCap ETF has $48.19 billion in assets, iShares Core S&P MidCap ETF has $59.28 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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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SPDR Portfolio S&P 400 Mid Cap ETF (SPMD): ETF Research Reports
Alcoa (AA) : Free Stock Analysis Report
Camden Property Trust (CPT) : Free Stock Analysis Report
Targa Resources, Inc. (TRGP) : Free Stock Analysis Report
iShares Core S&P MidCap ETF (IJH): ETF Research Reports
Vanguard MidCap ETF (VO): ETF Research Reports
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