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Should SPDR S&P 400 Mid Cap Growth ETF (MDYG) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the SPDR S&P 400 Mid Cap Growth ETF (MDYG - Free Report) 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 $2.54 billion, making it one of the larger ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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. Thus they have a nice balance of growth potential and stability.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.98%.
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 29.20% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Williams Sonoma Inc (WSM - Free Report) accounts for about 1.50% of total assets, followed by Carlisle Cos Inc (CSL - Free Report) and Pure Storage Inc Class A (PSTG - Free Report) .
The top 10 holdings account for about 13.01% of total assets under management.
Performance and Risk
MDYG seeks to match the performance of the S&P MidCap 400 Growth Index before fees and expenses. The S&P MidCap 400 Growth Index measures the performance of the mid-capitalization growth sector in the U.S. equity market.
The ETF has added roughly 14.79% so far this year and was up about 17.59% in the last one year (as of 07/19/2024). In the past 52-week period, it has traded between $64.85 and $89.18.
The ETF has a beta of 1.08 and standard deviation of 20.78% for the trailing three-year period, making it a medium risk choice in the space. With about 248 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid 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, MDYG is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $13.45 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.38 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.
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Should SPDR S&P 400 Mid Cap Growth ETF (MDYG) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Growth segment of the US equity market, the SPDR S&P 400 Mid Cap Growth ETF (MDYG - Free Report) 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 $2.54 billion, making it one of the larger ETFs attempting to match the Mid Cap Growth segment of the US equity market.
Why Mid Cap Growth
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. Thus they have a nice balance of growth potential and stability.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Further, growth stocks have a higher level of volatility associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 0.98%.
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 29.20% of the portfolio. Consumer Discretionary and Information Technology round out the top three.
Looking at individual holdings, Williams Sonoma Inc (WSM - Free Report) accounts for about 1.50% of total assets, followed by Carlisle Cos Inc (CSL - Free Report) and Pure Storage Inc Class A (PSTG - Free Report) .
The top 10 holdings account for about 13.01% of total assets under management.
Performance and Risk
MDYG seeks to match the performance of the S&P MidCap 400 Growth Index before fees and expenses. The S&P MidCap 400 Growth Index measures the performance of the mid-capitalization growth sector in the U.S. equity market.
The ETF has added roughly 14.79% so far this year and was up about 17.59% in the last one year (as of 07/19/2024). In the past 52-week period, it has traded between $64.85 and $89.18.
The ETF has a beta of 1.08 and standard deviation of 20.78% for the trailing three-year period, making it a medium risk choice in the space. With about 248 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid 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, MDYG is a good option for those seeking exposure to the Style Box - Mid Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap Growth ETF (VOT - Free Report) and the iShares Russell Mid-Cap Growth ETF (IWP - Free Report) track a similar index. While Vanguard Mid-Cap Growth ETF has $13.45 billion in assets, iShares Russell Mid-Cap Growth ETF has $14.38 billion. VOT has an expense ratio of 0.07% and IWP charges 0.23%.
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.