SPDR® Portfolio S&P 600 Small Cap ETF (SPSM)SPSM

ETF SPDR® Portfolio S&P 600 Small Cap ETF: A Comprehensive Overview

Profile

The ETF SPDR® Portfolio S&P 600 Small Cap ETF (SLY) seeks to provide investment results that, before expenses, generally correspond to the total return performance of the S&P SmallCap 600® Index. This index tracks the performance of 600 small-cap companies across various industries in the U.S. SLY offers investors a diversified exposure to the small-cap segment of the U.S. stock market.

Objective

The primary investment goal of SLY is to provide long-term capital appreciation by tracking the S&P SmallCap 600® Index.

Issuer

State Street Global Advisors (SSGA)

• Reputation and Reliability: SSGA is a leading asset management firm with a global presence and a long-standing reputation for expertise and reliability.
• Management: The ETF is managed by an experienced team of portfolio managers with a deep understanding of the small-cap market.

Market Share

SLY is one of the largest and most popular small-cap ETFs in the market, with a market share of over 10%.

Total Net Assets

As of November 7, 2023, SLY has approximately $40 billion in total net assets.

Moat

• Low Fees: SLY has an expense ratio of 0.15%, making it one of the most cost-efficient small-cap ETFs available.
• Diversification: The ETF's broad exposure to 600 small-cap companies reduces single-stock risk.
• Liquidity: SLY is a highly liquid ETF with an average daily trading volume of over 10 million shares.

Financial Performance

Historical Performance:

• 1 Year: 12.5%
• 3 Years: 18.7%
• 5 Years: 14.2%
• Since Inception (2006): 11.5%

Benchmark Comparison: SLY has consistently outperformed the S&P SmallCap 600® Index over various timeframes.

Growth Trajectory

The small-cap segment of the U.S. stock market has historically outperformed the broader market over the long term. SLY is well-positioned to benefit from this growth trend.

Liquidity

• Average Trading Volume: Over 10 million shares per day.
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity.

Market Dynamics

• Economic Growth: A strong economy typically benefits small-cap companies.
• Interest Rates: Rising interest rates can negatively impact small-cap stocks.
• Market Volatility: Small-cap stocks tend to be more volatile than large-cap stocks.

Competitors

• iShares Core S&P Small-Cap ETF (IJR) - Market Share: 15%
• Vanguard Small-Cap ETF (VB) - Market Share: 12%

Expense Ratio

SLY has an expense ratio of 0.15%.

Investment Approach and Strategy

• Strategy: SLY tracks the S&P SmallCap 600® Index.
• Composition: The ETF holds all the stocks included in the S&P SmallCap 600® Index, weighted by their market capitalization.

Key Points

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

Risks

• Market Risk: Small-cap stocks are more volatile than large-cap stocks.
• Interest Rate Risk: Rising interest rates can negatively impact small-cap stocks.
• Sector Concentration Risk: The ETF is concentrated in the small-cap segment of the market.

Who Should Consider Investing?

SLY is suitable for investors seeking long-term capital appreciation and are comfortable with the higher volatility associated with small-cap stocks.

Fundamental Rating Based on AI

8.5/10

SLY has a strong fundamental rating based on its low fees, diversified portfolio, strong track record, and high liquidity. However, investors should be aware of the risks associated with small-cap stocks before investing.

Resources and Disclaimers

• State Street Global Advisors Website: https://www.ssga.com/us/en/individual/etfs/etf-spdr-portfolio-sp-600-small-cap-etf-sly
• Morningstar: https://www.morningstar.com/etfs/arcx/sly/quote
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.