A sound investment process and strong management team underpin SPDR S&P SmallCap 600 ESG ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in momentum exposure and quality exposure compared with category peers. Momentum is the premise that stocks that have recently outperformed will continue to do so. With low momentum exposure, the portfolio is holding stocks that managers believe to be undervalued. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Ensign Group

Fabrinet

SPS Commerce

AAON

SM Energy

Abercrombie & Fitch

Boise Cascade

Meritage Homes

Federal Signal

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. SPDR S&P SmallCap 600 ESG ETF earns a High Process Pillar rating. The most notable contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The parent firm's five-year risk-adjusted success ratio of 58% also contributes to the process. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their relatively high success ratio suggests that the firm does well for investors and that this fund may benefit from that. The parent firm's strong risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, strengthens the process as well.

The investment strategy as stated in the fund's prospectus is:  The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P SmallCap 600 ESG Index.  Under normal market conditions, the fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. The index is designed to measure the performance of securities meeting certain sustainability criteria, and while maintaining similar overall industry group weights as the S&P SmallCap 600 Index. The fund is non-diversified. 

 The portfolio is overweight in consumer cyclical by 3.4 percentage points in terms of assets compared with the category average, and its real estate allocation is similar to the category. The sectors with low exposure compared to category peers are healthcare and technology; however, the allocations are similar to the category. The portfolio is composed of 365 holdings and is diversified among those holdings. In its most recent portfolio, 9.5% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category’s 23.9% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 39% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

High

Process

State Street’s team is strong compared with others in the industry, resulting in an Above Average People Pillar rating. There are two managers listed on the fund: Karl Schneider, Emiliano Rabinovich. The team is well equipped, with an average of 23 years of portfolio management experience. Together, they manage a total of four strategies, with a Gold asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

State Street Global Advisors is under new leadership but continues to move along the positive trajectory established by former leaders. SSGA maintains its Above Average Parent Pillar rating.
Cyrus Taraporevala, who oversaw much of SSGA’s recent transformation, retired from the CEO position in December 2022 and passed the baton to his successor, Yie-Hsin Hung. She inherited a business that’s become more disciplined with its fund lineup. Fees have come down, while product development remains focused on fixed-income and sustainability funds, and many of SSGA’s launches have echoed that intention.
The seeds that SSGA planted over the past several years have been bearing fruit. It built out a low-cost series of portfolio building-block ETFs in the U.S. bearing the “SPDR Portfolio” branding. SSGA launched these later than its industry rivals, so they aren’t as large. But they’re competitive, with solid management and low fees, which helped them consistently take in new money over the past several years.
SSGA continued to overhaul its ETF business in Europe with most of its recent fixed-income and sustainability fund launches. Many of these funds track indexes and charge relatively low fees. With operations in the U.S. and Europe standing on a firm foundation, SSGA will put more focus on its Asia-Pacific business—the smallest regional segment of its business.

Parent

SPDR S&P SmallCap 600 ESG ETF

ESIX tracks a market-cap-weighted index of US small-cap companies screened for environmental, social, and governance (ESG) factors.

Small-cap stocks and the related exchange traded funds topped their large-cap counterparts in 2022, stoking speculation that more of the same could be in the offing in 2023. Should that prognostication prove accurate, ETFs such as the SPDR S&P SmallCap 600 ESG ETF (ESIX), among others, could benefit.

Small-Caps Could Deliver Big in 2023

SPDR S&P 500 ESG ETF

Spdr Bloomberg SASB Developed Markets EX US ESG Select

This year was a trying one for environmental, social, and governance (ESG) ETFs. There's the obvious matter of many ESG funds slumping because growth stocks did the same.

Expect More Companies to Capitalize on ESG in 2023

There was a time when environmental, social, and governance (ESG) exchange traded funds were viewed as satellite positions or complements to traditional core holdings, but that moment has passed.

ESG ETFs Continue Making Inroads as Core Holdings

Small-cap stocks usually aren't inexpensive. Throw in an environmental, social, and governance (ESG) overlay, and that price of admission can increase.

Price of Admission Attractive With ESIX

Small-cap stocks and exchange traded funds followed large-cap counterparts lower this year, but there are plenty of examples of small-cap ETFs outpacing large-cap rivals. As such, there's been ample chatter about smaller stocks being better positioned for success in 2023.

Enough Value in ESIX to Make It Valuable

SPDR MSCI USA Climate Paris Aligned ETF

SPDR Bloomberg SASB Emerging Markets ESG Select ETF

SPDR SSGA Gender Diversity Index ETF

Environmental, social, and governance (ESG) investing is under increasing scrutiny this year as regulators clamp down on greenwashing and as some politicians target the investing style, asserting that the asset managers behind it are politically motivated. Even with those controversies, a majority of financial professionals back this methodology and see long-term relevance.

Financial Pros Still Back ESG

This is the time of year when investors start getting optimistic about how stocks will close the year while focusing on expectations for better equity market performance in the following year. There's evidence that good times could be emerging, as highlighted by a 5.33% gain by the S&P 500 over the past month.

Evaluate ESIX for Small-Cap Rebound Idea

One of the prominent themes in 2022 has been the strength of the U.S. dollar, which has been a drag on large-cap companies that generate significant portions of their sales outside the U.S. That scenario is weighing on small stocks, too, and unfairly at that.

ESIX May Be Right Elixir for Strong Dollar Jitters

Small-cap stocks and exchange traded funds might not be the first assets on investors' minds these days owing to a poor start to 2022, but in recent weeks, smaller stocks are showing some grit.

This Small-Cap SSGA ETF ‘ESIX' Could Be Ready to Shine

With equities volatile amid growing macroeconomic concerns and with many market participants looking to eschew risk, it's not surprising small-cap stocks and the related exchange traded funds are incurring some punishment. That doesn't mean investors should outright ignore the asset class.

Investors May Be Departing Small-Caps Too Soon

SPDR Nuveen Municipal Bond ESG ETF

SPDR S&P 500 Fossil Fuel Reserves Free ETF

Investors should take a look at exchange traded fund strategies to help capitalize on the potential benefits of environmental, social, and governance investing in the current market.

ETF Strategies to Access the Growing ESG Opportunities

Environmental, social and governance (ESG) funds lagged in the first half of 2022. The same is true of small-cap equities, but some analysts remain bullish on the prospects for a small-cap rebound.

ESIX Could Be Excellent for ESG, Small-Cap Rebounds

A result of stocks sagging this year is that analysts and market observers are now paring estimates for broad benchmarks, namely the S&P 500. While some market participants have trepidation regarding large-cap stocks, some are more constructive on small-caps.

This Could Be an Ideal ESG Fund for Back Half of 2022

With large-cap equities sagging, it's understandably difficult for investors to get enthusiastic about small-cap stocks and the relevant exchange traded funds. However, the combination of small stocks and environmental, social, and governance (ESG) virtues could provide benefits to investors, even in this tricky market setting.

Small-Cap/ESG Combination Offers Benefits

Like their large-cap counterparts, small-cap stocks and exchange traded funds suffered in the first half of 2022, but some market observers believe smaller stocks are in for better things in the back half of the year. If that outlook bears fruit, investors could be rewarded by embracing the combination of small-cap equities and environmental, social, [.

ESG Could Be Key to Small-Cap Rebound

Small-cap equity benchmarks, such as the Russell 2000 and S&P SmallCap 600 indexes, have plenty of work to do to reclaim lost glory, but some market observers believe small-caps are offering near- to medium-term rebound potential. Investors looking to participate in that trend while bringing environmental, social, and governance (ESG) benefits to the table have [.

ESIX: Virtuous Way to Play Small-Cap Rebound

Small-cap stocks are following large-cap counterparts lower this year, but quiet as it's been kept, the S&P SmallCap 600 Index is outperforming the large-cap S&P 500 by more than 200 basis points year-to-date.

ESG Could Be Way to Access Small-Cap Bargains

Clockwise Capital Innovation ETF

Global X Dow 30 Covered Call ETF

Dimensional US High Profitability ETF

Harbor Corporate Culture Leaders ETF

SPDR R Blackstone High Income ETF

Amplify Inflation Fighter ETF

IQ US Mid Cap R&D Leaders ETF

Engine NO 1 Transform Climate ETF

The U.S. exchange-traded fund (ETF) industry had quite a year in 2021 – due in part to the 445 new ETFs that launched, 44% more than did in 2020. U.S. ETFs ended the year with record assets of $7.21 trillion, 31.9% higher 2020.

9 New ETFs for Investors to Unwrap

Small-cap stocks aren't often thought as a primary destination for investors seeking the advantages of environmental, social, and governance (ESG) principles, but as the landscape of ESG exchange traded funds evolves, more products are providing access to smaller stocks. Consider the SPDR S&P SmallCap 600 ESG ETF (ESIX).

Small-Cap ESG ETF Has Big Potential

Following the labor shortages that most industries are facing as a result of “The Great Resignation,” more investors are wanting public companies to disclose something they haven't typically divulged before: their ability to hire and retain staff. Per a report from the Wall Street Journal, while a company's staff is important to forecasting its profitability, [.

More Investors Want Companies to Report Human Capital Data

Over 70 private equity firms have signed an agreement to collect and report data on emissions, workplace fatalities, and gender diversity on the boards of companies contained in their portfolios. This move could help push regulatory talks forward in Washington, reports Bloomberg.

Private Equity Might Be Moving the ESG Reporting Needle

In a vastly more competitive job market where companies are vying to recruit talented employees, a company's practices regarding their employees are more important than ever. It's an element of ESG that has seen a much greater focus since the onset of the pandemic, and State Street Global Advisors believes that a greater sustained focus [.

ESG Investing: Why the Human Element Matters More Than Ever

The three index funds cover emerging markets, ex-U.S. developed markets and small caps.

State Street Debuts Trio Of ESG ETFs

State Street Global Advisors launched three new ESG-focused ETFs on the New York Stock Exchange today: the SPDR® S&P SmallCap 600 ESG ETF (ESIX), the SPDR Bloomberg SASB Developed Markets Ex US ESG Select ETF (RDMX), and the SPDR Bloomberg SASB Emerging Markets ESG Select ETF (REMG).

News for SPDR S&P SmallCap 600 ESG ETF ETF (ESIX)