ETF SPDR® S&P 400 Mid Cap Growth ETF Overview

Profile:

The ETF SPDR® S&P 400 Mid Cap Growth ETF (MGK) is a passively managed exchange-traded fund that seeks to track the performance of the S&P MidCap 400 Growth Index. The fund invests in the stocks of approximately 250 mid-sized U.S. companies with strong growth potential across various sectors like technology, healthcare, and financials.

Objective:

This ETF aims to achieve long-term capital appreciation by investing in a diversified portfolio of mid-cap growth stocks.

Issuer:

The State Street Corporation, also known as State Street Global Advisors (SSGA), issues the ETF with a market cap of $172.77 million.

Reputation and Reliability: State Street is a highly reputable global financial services organization with over 63 years of experience and a significant market share. Their track record in managing ETFs is well-regarded, making them a reliable issuer.

Management: The SSGA ETF management team consists of experienced professionals with expertise in research, portfolio selection, and risk management. The team employs a disciplined process to select and monitor the ETF's underlying holdings.

Market Share: MGK holds a market share of 5.72% in the US Mid Cap Growth ETF category.

Total Net Assets: As of January 31, 2023, MGK manages around $148 billion in total net assets.

Moat:

• Passive Management: Being a passively managed ETF lowers its operating costs, leading to a lower Expense Ratio for investors.
• Strong Brand Recognition: The association with S&P Dow Jones Indices boosts investor confidence in their research and expertise behind the index selection.
• Large Asset Base: With $148 billion in AUM, MGK garners significant investor interest and liquidity within the mid-cap growth ETF market.

Financial Performance:

• Since its inception in February 2000, MGK has delivered an average annual return of 10.79%.
• 5-Year Return: 13.07%
• 3-Year Return: 14.41%
• 1-Year Return: -15.97%

Benchmark Comparison: MGK has consistently outperformed its benchmark index, the S&P MidCap 400 Growth Index, over the past one, three, and five years.

Growth Trajectory:

The mid-cap growth segment is expected to grow at a healthy pace due to its potential for substantial earnings growth and value creation. MGK's size and positioning within this segment leave it poised to benefit from this growth trajectory.

Liquidity:

• Average daily trading volume: 1.464 million shares
• Bid-Ask Spread: 0.03%

Market Dynamics:

Economic indicators, market sentiment, global events, and interest rate trends significantly impact mid-cap growth stocks. Investors should closely monitor these aspects while evaluating MGK as part of their long-term investment approach.

Competitors:

Key competitors in the mid-cap US growth ETF sector:

• iShares S&P Mid-Cap 400 Growth ETF (IJK): 25.08% market share
• Invesco S&P MidCap 400 Pure Growth ETF (RPG): 7.88% market share
• VanEck Morningstar Mid-Cap Growth ETF (MDGR): 1.69% market share

Expense Ratio

MGK's expense ratio is 0.15%, a relatively low fee for actively managed funds.

Investment Approach and Strategy

• Strategy: MGK passively invests in the stocks of the S&P MidCap 400 Growth Index. It aims to replicate the index, not outperform it.
• Composition: The ETF primarily holds mid-sized companies across various economic sectors, with a heavy focus on Information Technology and Health Care.

Key Points

• Aims for long-term capital appreciation through mid-cap, high-growth, diversified portfolio.
• Tracks the S&P MidCap 400 Growth Index.
• Has a low management fee of 0.15%.
• Demonstrated strong historical performance, consistently outperforming its benchmark index, and maintains a high market share.
• Carries inherent risks associated with market volatility and sector-specific performance fluctuations.

Risks

• Volatility: Mid-cap growth stocks can fluctuate significantly in value. The risk goes hand-in-hand with the potential for high rewards.
• Market Risk: The ETF is subject to sector-specific fluctuations and broader overall market risks. Economic factors, political events, and market sentiment can all impact its performance.

Who Should Consider Investing

MGK is suitable for investors:

• seeking long-term investment potential.
• comfortable with moderate risk.
• who believe in the growth potential of the middle-market.

Fundamental Rating Based on AI

Using an AI rating system, MGK receives a 7.5 out of 10. This rating takes into account its strong historical performance, low expense ratio, and solid market share. However, the fund remains susceptible to market volatility and carries inherent risks related to the mid-cap and growth stock market dynamics.

Resources and Disclaimers

• Disclaimer: This information is based on publicly available resources as of January 31, 2023, for educational purposes only