If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the State Street SPDR S&P MIDCAP 400 ETF Trust (MDY), a passively managed exchange traded fund launched on May 4, 1995.
The fund is sponsored by State Street Investment Management. It has amassed assets over $25.63 billion, making it one of the larger ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.23%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.05%.
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 25.4% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Lumentum Holdings Inc. (LITE) accounts for about 1.11% of total assets, followed by Ciena Corporation (CIEN) and Coherent Corp. (COHR).
The top 10 holdings account for about 7.95% of total assets under management.
Performance and Risk
MDY seeks to match the performance of the S&P MidCap 400 Index before fees and expenses. The S&P MidCap 400 Index is composed of 400 selected stocks listed on national stock exchanges, and spans a broad range of major industry groups.
The ETF has added roughly 8.68% so far this year and was up about 17.15% in the last one year (as of 02/26/2026). In the past 52-week period, it has traded between $468.22 and $658.61.
The ETF has a beta of 1.05 and standard deviation of 17.9% for the trailing three-year period, making it a medium risk choice in the space. With about 401 holdings, it effectively diversifies company-specific risk.
Alternatives
State Street SPDR S&P MIDCAP 400 ETF Trust carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MDY is a sufficient option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Mid-Cap ETF (VO) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $95.81 billion in assets, iShares Core S&P Mid-Cap ETF has $112.34 billion. VO has an expense ratio of 0.03% and IJH charges 0.05%.
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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State Street SPDR S&P MIDCAP 400 ETF Trust (MDY): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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