Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the SPDR Portfolio S&P 500 Growth ETF (SPYG) is a passively managed exchange traded fund launched on 09/25/2000.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $32.60 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don’t perform as strongly in almost all other financial environments.
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 0.04%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.65%.
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund’s holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector–about 49.10% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.63% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).
The top 10 holdings account for about 60.1% of total assets under management.
SPYG seeks to match the performance of the S&P 500 Growth Index before fees and expenses. The S&P 500 Growth Index measures the performance of the large-capitalization growth sector in the U.S. equity market.
The ETF has added about 35.04% so far this year and is up roughly 43.73% in the last one year (as of 11/13/2024). In the past 52-week period, it has traded between $62.24 and $87.59.
The ETF has a beta of 1.07 and standard deviation of 21.87% for the trailing three-year period, making it a medium risk choice in the space. With about 236 holdings, it effectively diversifies company-specific risk.
