The SPDR Portfolio S&P 500 ETF (SPLG – Free Report) was launched on 11/08/2005, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $15.86 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 0.03%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.58%.
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 Information Technology sector–about 26.50% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc. (AAPL – Free Report) accounts for about 7.37% of total assets, followed by Microsoft Corporation (MSFT – Free Report) and Amazon.com Inc. (AMZN – Free Report) .
The top 10 holdings account for about 26.77% of total assets under management.
Performance and Risk
SPLG seeks to match the performance of the Russell 1000 Index before fees and expenses. The S&P 500 Index is designed to measure the performance of the large-capitalization segment of the U.S. equity market.
The ETF has lost about -13.77% so far this year and is down about -9.25% in the last one year (as of 12/01/2022). In the past 52-week period, it has traded between $41.93 and $56.19.
The ETF has a beta of 1 and standard deviation of 25.14% for the trailing three-year period. With about 506 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 500 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, SPLG is a good option for those seeking exposure to the Style Box – Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV – Free Report) and the SPDR S&P 500 ETF (SPY – Free Report) track a similar index. While iShares Core S&P 500 ETF has $311.12 billion in assets, SPDR S&P 500 ETF has $388.14 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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.
Read More: Should SPDR Portfolio S&P 500 ETF (SPLG) Be on Your Investing Radar? – December 1, 2022