Should SPDR S&P 400 Mid Cap Value ETF (MDYV) Be on Your Investing Radar?
The SPDR S&P 400 Mid Cap Value ETF (MDYV) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $1.46 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. These types of companies, then, have a good balance of stability and growth potential.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.62%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 22.20% of the portfolio. Industrials and Real Estate round out the top three.
Looking at individual holdings, Steel Dynamics Inc. (STLD) accounts for about 0.96% of total assets, followed by East West Bancorp Inc. (EWBC) and Owens Corning (OC).
The top 10 holdings account for about 7.94% of total assets under management.
Performance and Risk
MDYV seeks to match the performance of the S&P MidCap 400 Value Index before fees and expenses. This Index measures the performance of the mid-capitalization value sector in the U.S. equity market. The Index consists of those stocks in the S&P MidCap 400 Index exhibiting the strongest value characteristics based on: book value to price ratio;earnings to price ratio & sales to price ratio.
The ETF has gained about 25.57% so far this year and was up about 46.83% in the last one year (as of 10/12/2021). In the past 52-week period, it has traded between $44.54 and $70.76.
The ETF has a beta of 1.27 and standard deviation of 29.67% for the trailing three-year period, making it a medium risk choice in the space. With about 312 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid Cap Value 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, MDYV is an outstanding option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell MidCap Value ETF (IWS) and the Vanguard MidCap Value ETF (VOE) track a similar index. While iShares Russell MidCap Value ETF has $14.17 billion in assets, Vanguard MidCap Value ETF has $14.64 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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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SPDR S&P 400 Mid Cap Value ETF (MDYV): ETF Research Reports
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
Owens Corning Inc (OC) : Free Stock Analysis Report
East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
Vanguard MidCap Value ETF (VOE): ETF Research Reports
iShares Russell MidCap Value ETF (IWS): ETF Research Reports
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