Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the SPDR S&P 600 Small Cap Growth ETF (SLYG), a passively managed exchange traded fund launched on September 25, 2000.
The fund is sponsored by State Street Investment Management. It has amassed assets over $3.37 billion, making it one of the larger ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
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 1.25%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector -- about 23.9% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Aerovironment Inc (AVAV) accounts for about 1.19% of total assets, followed by Spx Technologies Inc (SPXC) and Brinker International Inc (EAT).
The top 10 holdings account for about 10.34% of total assets under management.
Performance and Risk
SLYG seeks to match the performance of the S&P SmallCap 600 Growth Index before fees and expenses. The S&P SmallCap 600 Growth Index measures the performance of the small-capitalization growth sector in the U.S. equity market. The selection universe for the S&P SmallCap 600 Index includes all U.S. common equities listed on the NYSE, NASDAQ Global Select Market, NASDAQ Select Market and NASDAQ Capital Market with market capitalizations between $250 million and $1.2 billion.
The ETF has lost about 0.89% so far this year and is up roughly 5.22% in the last one year (as of 08/08/2025). In the past 52-week period, it has traded between $72.61 and $100.66.
The ETF has a beta of 1.07 and standard deviation of 21.32% for the trailing three-year period, making it a medium risk choice in the space. With about 344 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 600 Small Cap Growth 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, SLYG is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $11.67 billion in assets, Vanguard Small-Cap Growth ETF has $19.21 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 600 Small Cap Growth ETF (SLYG): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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