Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the SPDR S&P 600 Small Cap Growth ETF (SLYG) is 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 $3.56 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but 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. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.12%.
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 Industrials sector -- about 22.3% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Sterling Infrastructure Inc (STRL) accounts for about 1.31% of total assets, followed by Spx Technologies Inc (SPXC) and Armstrong World Industries (AWI).
The top 10 holdings account for about 10.66% 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 added about 4.41% so far this year and was up about 3.09% in the last one year (as of 10/10/2025). In the past 52-week period, it has traded between $72.61 and $100.66.
The ETF has a beta of 1.09 and standard deviation of 20.69% for the trailing three-year period, making it a medium risk choice in the space. With about 347 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 reasonable 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 $13.09 billion in assets, Vanguard Small-Cap Growth ETF has $20.74 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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 S&P 600 Small Cap Growth ETF (SLYG): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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