Launched on 09/25/2000, the SPDR Portfolio S&P 500 Growth ETF (SPYG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $13.92 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
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 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.94%.
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 Information Technology sector--about 45.60% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 14.98% of total assets, followed by Microsoft Corporation (MSFT) and Amazon.com Inc. (AMZN).
The top 10 holdings account for about 53.38% of total assets under management.
Performance and Risk
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 lost about -26.03% so far this year and is down about -24.82% in the last one year (as of 11/23/2022). In the past 52-week period, it has traded between $49.14 and $73.48.
The ETF has a beta of 1.05 and standard deviation of 28.04% for the trailing three-year period, making it a medium risk choice in the space. With about 242 holdings, it effectively diversifies company-specific risk.
SPDR Portfolio S&P 500 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, SPYG is a reasonable option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $71.22 billion in assets, Invesco QQQ has $161.05 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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 Portfolio S&P 500 Growth ETF (SPYG): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports