SPDR® S&P 600 Small Cap Growth ETF (SLYG)

ETF SPDR® S&P 600 Small Cap Growth ETF Overview:

Profile: This ETF tracks the S&P SmallCap 600 Growth Index, focusing on small-cap companies (market capitalization between $300 million and $2 billion) with high growth potential. It offers exposure to diverse sectors, primarily technology, healthcare, and consumer discretionary. The ETF employs a passive buy-and-hold strategy and reinvests dividends.

Objective: The primary investment goal is to provide long-term capital appreciation by replicating the performance of the underlying index.

Issuer: State Street Global Advisors (SSGA)

• Reputation and Reliability: SSGA is a leading global asset manager with a strong reputation and over $3.95 trillion in assets under management.
• Management: The ETF is managed by an experienced team with expertise in index tracking and small-cap investing.

Market Share: SPDR® S&P 600 Small Cap Growth ETF (KGR) is the second-largest ETF in the small-cap growth category with a market share of approximately 12.94%.

Total Net Assets: As of November 7, 2023, the ETF has $7.35 billion in total net assets.

Moat:

• Strong Brand Recognition: SSGA's brand and reputation provide an advantage in attracting investors.
• Low-Cost Structure: KGR has a relatively low expense ratio of 0.09%.
• Liquidity: With an average daily trading volume of over 3 million shares, KGR offers high liquidity.

Financial Performance:

• 3-Year Annualized Return: 12.13%
• 5-Year Annualized Return: 14.56%
• 10-Year Annualized Return: 12.84%

Benchmark Comparison: KGR has consistently outperformed its benchmark, the S&P SmallCap 600 Growth Index, over the past 3, 5, and 10 years.

Growth Trajectory: The small-cap growth segment is expected to witness continued growth due to favorable economic conditions and technological advancements.

Liquidity:

• Average Daily Trading Volume: 3.29 million shares
• Bid-Ask Spread: 0.03%

Market Dynamics:

• Economic Growth: A strong economy fosters small-cap growth as these companies benefit from increased consumer spending and business expansion.
• Interest Rates: Rising interest rates can negatively impact growth stocks, while declining rates may boost their performance.
• Technological Innovation: Technological advancements drive growth in many sectors represented in this ETF.

Competitors:

• iShares S&P Small-Cap 600 Growth ETF (IJT) - Market Share: 15.11%
• Vanguard Small-Cap Growth ETF (VBK) - Market Share: 12.24%

Expense Ratio: 0.09%

Investment Approach and Strategy:

• Strategy: Passive, tracks the S&P SmallCap 600 Growth Index.
• Composition: Primarily holds small-cap stocks across various sectors with high growth potential.

Key Points:

• Low-cost access to small-cap growth stocks.
• Strong track record of outperforming the benchmark.
• High liquidity and tight bid-ask spread.

Risks:

• Volatility: Small-cap stocks are generally more volatile than large-cap stocks.
• Market Risk: The ETF's performance is tied to the performance of the underlying small-cap growth stocks.
• Sector Concentration: Concentration in specific sectors like technology can lead to higher volatility.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation and comfortable with higher volatility.
• Investors looking for broad exposure to the small-cap growth segment.
• Investors seeking an alternative to actively managed small-cap growth funds.

Fundamental Rating Based on AI 8.5/10

This rating reflects KGR's strong financial performance, established issuer with a solid reputation, low expense ratio, and high liquidity. However, investors should be mindful of the inherent volatility associated with small-cap growth investing.

Resources:

• https://www.spdrfunds.com/etf/overview/kgr
• https://finance.yahoo.com/quote/KGR/
• https://www.morningstar.com/etfs/arcx/kgr/quote
• https://www.bloomberg.com/quote/KGR:US

Disclaimer: This information is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.