Should SPDR S&P 400 Mid Cap Value ETF (MDYV) Be on Your Investing Radar?
Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the SPDR S&P 400 Mid Cap Value ETF (MDYV), a passively managed exchange traded fund launched on 11/08/2005.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $749.16 M, making it one of the average sized ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
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. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.78%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 19.10% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Hollyfrontier Corporation (HFC) accounts for about 1.29% of total assets, followed by Steel Dynamics Inc. (STLD) and Reinsurance Group Of America Incorporated (RGA).
The top 10 holdings account for about 10.71% 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 added roughly 1.64% so far this year and was up about 12.08% in the last one year (as of 05/24/2018). In the past 52-week period, it has traded between $92.76 and $106.43.
The ETF has a beta of 1 and standard deviation of 14.57% for the trailing three-year period, making it a medium risk choice in the space. With about 298 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 400 Mid Cap Value 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, MDYV is a sufficient option for those seeking exposure to the Mid Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap Value ETF (VOE) and the iShares Russell Mid-Cap Value ETF (IWS) track a similar index. While Vanguard Mid-Cap Value ETF has $8.51 B in assets, iShares Russell Mid-Cap Value ETF has $10.62 B. VOE has an expense ratio of 0.07% and IWS charges 0.25%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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-SP4 MC VL (MDYV): ETF Research Reports
ISHARS-RS M VL (IWS): ETF Research Reports
VANGD-MC VALUE (VOE): ETF Research Reports
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
HollyFrontier Corporation (HFC) : Free Stock Analysis Report
Steel Dynamics, Inc. (STLD) : Free Stock Analysis Report
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