Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the SPDR Portfolio S&P 600 Small Cap ETF (SPSM), a passively managed exchange traded fund launched on 07/08/2013.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $11.21 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
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.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
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 0.03%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.98%.
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 Financials sector--about 19% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Mr Cooper Group Inc (COOP) accounts for about 0.61% of total assets, followed by Spx Technologies Inc (SPXC) and Stride Inc (LRN).
The top 10 holdings account for about 5.4% of total assets under management.
Performance and Risk
SPSM seeks to match the performance of the Russell 2000 Index before fees and expenses. The S&P SmallCap 600 Index is designed to measure the performance of the small-capitalization segment of the U.S. equity market.
The ETF has lost about -5.27% so far this year and is up roughly 3.89% in the last one year (as of 06/10/2025). In the past 52-week period, it has traded between $35.35 and $49.55.
The ETF has a beta of 1.07 and standard deviation of 22.13% for the trailing three-year period. With about 610 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 600 Small Cap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPSM is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $63.35 billion in assets, iShares Core S&P Small-Cap ETF has $79.28 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 Portfolio S&P 600 Small Cap ETF (SPSM): ETF Research Reports Stride, Inc. (LRN): Free Stock Analysis Report iShares Russell 2000 ETF (IWM): ETF Research Reports SPX Technologies, Inc. (SPXC): Free Stock Analysis Report iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports MR. COOPER GROUP INC (COOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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