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Should SPDR S&P 600 Small Cap ETF (SLY) Be on Your Investing Radar?
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Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the SPDR S&P 600 Small Cap ETF is a passively managed exchange traded fund launched on 11/08/2005.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.67 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 cheaper products in the space.
It has a 12-month trailing dividend yield of 1.68%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 17.90% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Agree Realty Corporation (ADC - Free Report) accounts for about 0.63% of total assets, followed by Exponent Inc. (EXPO - Free Report) and Amn Healthcare Services Inc. (AMN - Free Report) .
The top 10 holdings account for about 4.52% of total assets under management.
Performance and Risk
SLY seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index measures the performance of the small-capitalization sector in the US equity market.
The ETF has lost about -0.31% so far this year and is down about -8.67% in the last one year (as of 04/10/2023). In the past 52-week period, it has traded between $75.61 and $93.53.
The ETF has a beta of 1.15 and standard deviation of 26.54% for the trailing three-year period, making it a medium risk choice in the space. With about 604 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 600 Small 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, SLY is a great option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $48.25 billion in assets, iShares Core S&P Small-Cap ETF has $64.70 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 ETF (SLY) Be on Your Investing Radar?
Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the SPDR S&P 600 Small Cap ETF is a passively managed exchange traded fund launched on 11/08/2005.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.67 billion, making it one of the larger ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 cheaper products in the space.
It has a 12-month trailing dividend yield of 1.68%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 17.90% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Agree Realty Corporation (ADC - Free Report) accounts for about 0.63% of total assets, followed by Exponent Inc. (EXPO - Free Report) and Amn Healthcare Services Inc. (AMN - Free Report) .
The top 10 holdings account for about 4.52% of total assets under management.
Performance and Risk
SLY seeks to match the performance of the S&P SmallCap 600 Index before fees and expenses. The S&P SmallCap 600 Index measures the performance of the small-capitalization sector in the US equity market.
The ETF has lost about -0.31% so far this year and is down about -8.67% in the last one year (as of 04/10/2023). In the past 52-week period, it has traded between $75.61 and $93.53.
The ETF has a beta of 1.15 and standard deviation of 26.54% for the trailing three-year period, making it a medium risk choice in the space. With about 604 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 600 Small 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, SLY is a great option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM - Free Report) and the iShares Core S&P Small-Cap ETF (IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $48.25 billion in assets, iShares Core S&P Small-Cap ETF has $64.70 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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.