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Should SPDR S&P MidCap 400 ETF (MDY) Be on Your Investing Radar?
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Launched on 05/04/1995, the SPDR S&P MidCap 400 ETF (MDY - Free Report) 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 $23.16 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. 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.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.24%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.16%.
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 22.10% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Illumina Inc. (ILMN - Free Report) accounts for about 0.75% of total assets, followed by Carlisle Companies Incorporated (CSL - Free Report) and Lennox International Inc. (LII - Free Report) .
The top 10 holdings account for about 6.33% of total assets under management.
Performance and Risk
MDY seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index is composed of 400 selected stocks listed on national stock exchanges, and spans a broad range of major industry groups.
The ETF has added roughly 12.37% so far this year and is up about 26.94% in the last one year (as of 10/03/2024). In the past 52-week period, it has traded between $425.08 and $572.06.
The ETF has a beta of 1.11 and standard deviation of 20.24% for the trailing three-year period, making it a medium risk choice in the space. With about 401 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P MidCap 400 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, MDY is a sufficient option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $69.42 billion in assets, iShares Core S&P Mid-Cap ETF has $90.23 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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 MidCap 400 ETF (MDY) Be on Your Investing Radar?
Launched on 05/04/1995, the SPDR S&P MidCap 400 ETF (MDY - Free Report) 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 $23.16 billion, making it one of the largest ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Mid cap companies have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. 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.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.24%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.16%.
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 22.10% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Illumina Inc. (ILMN - Free Report) accounts for about 0.75% of total assets, followed by Carlisle Companies Incorporated (CSL - Free Report) and Lennox International Inc. (LII - Free Report) .
The top 10 holdings account for about 6.33% of total assets under management.
Performance and Risk
MDY seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index is composed of 400 selected stocks listed on national stock exchanges, and spans a broad range of major industry groups.
The ETF has added roughly 12.37% so far this year and is up about 26.94% in the last one year (as of 10/03/2024). In the past 52-week period, it has traded between $425.08 and $572.06.
The ETF has a beta of 1.11 and standard deviation of 20.24% for the trailing three-year period, making it a medium risk choice in the space. With about 401 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P MidCap 400 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, MDY is a sufficient option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $69.42 billion in assets, iShares Core S&P Mid-Cap ETF has $90.23 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
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.