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Should SPDR Portfolio S&P 500 ETF (SPLG) Be on Your Investing Radar?

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The SPDR Portfolio S&P 500 ETF (SPLG - Free Report) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by State Street Global Advisors. It has amassed assets over $43.22 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

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 0.02%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.28%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 30.70% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.92% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .

The top 10 holdings account for about 33.96% of total assets under management.

Performance and Risk

SPLG seeks to match the performance of the Russell 1000 Index before fees and expenses. The S&P 500 Index is designed to measure the performance of the large-capitalization segment of the U.S. equity market.

The ETF has gained about 18.51% so far this year and it's up approximately 29.85% in the last one year (as of 08/20/2024). In the past 52-week period, it has traded between $48.29 and $66.44.

The ETF has a beta of 1 and standard deviation of 17.38% for the trailing three-year period. With about 506 holdings, it effectively diversifies company-specific risk.

Alternatives

SPDR Portfolio S&P 500 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, SPLG is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $513.44 billion in assets, SPDR S&P 500 ETF has $564.58 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

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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