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Should SPDR Portfolio S&P 500 Value ETF (SPYV) Be on Your Investing Radar?

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·4-min read
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Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the SPDR Portfolio S&P 500 Value ETF (SPYV) is a passively managed exchange traded fund launched on 09/25/2000.

The fund is sponsored by State Street Global Advisors. It has amassed assets over $12.52 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull 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 0.04%, making it the least expensive products in the space.

It has a 12-month trailing dividend yield of 2.07%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 20.30% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Berkshire Hathaway Inc. Class B (BRK.B) accounts for about 3.06% of total assets, followed by Jpmorgan Chase & Co. (JPM) and Walt Disney Company (DIS).

The top 10 holdings account for about 17.79% of total assets under management.

Performance and Risk

SPYV seeks to match the performance of the S&P 500 Value Index before fees and expenses. The S&P 500 Value Index measures the performance of the large-capitalization value sector in the U.S. equity market.

The ETF return is roughly 19.56% so far this year and it's up approximately 32.40% in the last one year (as of 09/16/2021). In the past 52-week period, it has traded between $29.35 and $40.73.

The ETF has a beta of 1.02 and standard deviation of 23.26% for the trailing three-year period, making it a medium risk choice in the space. With about 435 holdings, it effectively diversifies company-specific risk.

Alternatives

SPDR Portfolio S&P 500 Value 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, SPYV is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $54.63 billion in assets, Vanguard Value ETF has $83.49 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.

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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
SPDR Portfolio S&P 500 Value ETF (SPYV): ETF Research Reports
 
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
Vanguard Value ETF (VTV): ETF Research Reports
 
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
 
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