SPDR S&P MIDCAP 400 ETF Trust MDY effectively combines a broadly diversified portfolio of U.S. mid-cap stocks with low turnover and a minuscule price, providing it with a durable edge over its category peers. 
The fund tracks the S&P MidCap 400 Index, which is a market-cap weighted basket of 400 mid-cap stocks that land between the 85th and 95th percentiles of the total U.S. stock market capitalization. An index committee has discretion over selecting stocks that meet certain liquidity, size, and profitability thresholds. 
Market-cap weighting is a sensible approach here. It harnesses the market’s collective view on the relative value of each holding and promotes diversification. Low turnover and associated trading costs add to the appeal.
Mid-cap stocks can take a variety of shapes. Some are companies with established business models and sound financials but lag large-cap stocks because they are not industry leaders. Others are smaller firms whose growth prospects come with volatile performance.
The fund diversifies risk effectively and tames concentration risk. Assets in the top 10 holdings constitute only 6.4% of the portfolio, 9.35 percentage points lower than the average mid-cap blend fund. In addition, it accurately mimics the complexion of its average peer in the mid-cap blend Morningstar Category in style and sector allocations. No sector deviates by more than 5 percentage points from the category average. These qualities emphasize the fund’s cost advantage in driving category-relative performance.
The fund’s 0.23% annual fee gives it a durable performance edge over category peers. Since its 1995 inception, the fund has outperformed its average peer by 1.74 percentage points annualized.

Analyst Rating

Diversified exposure to mid-cap stocks.

Associate Analyst

Mo'ath Almahasneh

Vistra Energy

Williams-Sonoma

Carlisle Companies

Reliance Steel & Aluminum

GoDaddy

EMCOR Group

Graco

Pure Storage

Lennox International

Owens Corning

The S&P 400 MidCap Index constructs a broadly diversified, low-turnover portfolio that accurately represents the mid-cap market. It warrants a High Process rating.

High

Process

SSGA appointed Bank of New York Mellon as the named trustee on this unit investment trust.
Despite recent turnover, the team at Mellon should continue to deliver tight index-tracking performance. However, they do not stand out from their peers and the fruits of the expansion are yet to be fully realized, warranting an Average People Pillar rating.
Marlene Walker-Smith is joined by a team of experienced managers on this strategy, following Thomas Durante's retirement in June 2021. David France, Todd Frysinger, Vlasta Sheremeta, and Michael Stoll are senior portfolio managers who have been with Mellon for 10 years or more. Daphne Du joined the team in April 2023.  They worked behind the scenes on the equity index team prior to being named managers. Their wealth of experience and the team’s supporting infrastructure should aid the expansion plans, which involve increasing headcount and consolidating trading, risk, and compliance systems.
The managers draw on a team of analysts to anticipate index changes and handle corporate actions. While the analyst team has facilitated effective index tracking, it is smaller than the analyst teams of other index fund managers, so personnel turnover may have a bigger impact on operations. The managers' primary objective is to track the benchmark as closely as possible. Manager compensation is not tied to any specific tracking-difference targets, but the team is subject to separate risk oversight.
Mellon merged three arms of its asset-management business in January 2018 and consolidated the trading operations from each unit into a single desk. This expanded the team's trading capabilities and expertise. The team has consolidated its portfolio management, compliance, and trading functions into BlackRock’s Aladdin platform to unify operations.

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.

Above Average

Parent

SPDR S&P Midcap 400 ETF Trust

MDY tracks a market cap-weighted index of mid-cap US companies.

SPDR S&P MidCap 400 ETF Trust is an ETF that invests in 400 mid-sized US companies. MDY was one of the first ETFs in 1995 and has amassed $21.3 billion in assets under management. While mid-cap stocks have historically outperformed large-cap stocks, this trend has reversed in the past 5 years.

MDY: A Bet On The Return Of Mid-Caps

Mega-cap tech performance dominates headlines and markets this quarter. It makes it easy to overlook opportunities beyond the biggest names, but investors should ensure they aren't leaving out midcaps when constructing diversified equity portfolios.

VNMC Outperforms Within Midcaps

If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the SPDR S&P MidCap 400 ETF (MDY), a passively managed exchange traded fund launched on 05/04/1995.

Should SPDR S&P MidCap 400 ETF (MDY) Be on Your Investing Radar?

The valuation gap between large caps and mid-caps widened in January as large-caps stocks outperformed mid-sized equities. I see the SPDR S&P Mid-Cap ETF as a relative value compared to large caps, while the ETF's absolute valuation is likewise attractive. MDY is priced right with a diverse sector allocation.

MDY: 5 Turns Cheaper Than The SPX, Mid-Caps Eye New Highs

The Fed's decision to pause its tightening cycle has sparked a bullish sentiment in the equity markets. Speculative institutions have been investing heavily in equities, particularly in the tech and consumer discretionary sectors. The SPDR S&P MidCap 400 ETF offers exposure to mid-cap equities and has a balanced weighting that may provide upside potential without sharp drawdowns.

MDY: Balance Drawdowns Amid Fresh Risk Appetite For Equities

MDY is a well-established, well-diversified mid-cap blend ETF with $17.3 billion in assets under management and a 0.23% expense ratio. This article evaluates MDY against three S&P MidCap 400 alternatives. The goal is to identify whether MDY's plain-vanilla strategy is superior to ETFs using revenue, GARP, or multi-factor strategies and weighting schemes. I discovered some pros and cons to consider. MDY is reasonably low-risk, evidenced by its lower five-year beta and strong diversification. Shareholders would benefit from a secular change, as mid-caps have underperformed large-caps in the last 8-10 years.

MDY: Well-Diversified, Solid Mid-Cap ETF, But Quality Is Suspect

Agree Realty

Alexandria Real Estate Equities

Crown Castle International

Mid-America Apartment Communities

Medical Properties Trust

Realty Income Corp

SPDR Portfolio Small Cap ETF

SPDR S&P 500 ETF Trust

Vici Properties

Vanguard Real Estate ETF

Larger REITs have outperformed small- and mid-sized REITs in the last five years, thanks partially to their concentration in high-growth sectors. Modestly leveraged REITs can still grow their bottom-line profits even with rapidly rising interest expenses because revenue is growing as well. I highlight five high-quality, larger market cap REITs that are currently trading at reasonable (or better-than-reasonable) valuations. I'm buying for the long haul.

Bloodshed On REIT Street: 5 High-Quality Landlords I'm Buying For The Long Haul

Invesco S&P MidCap 400 Equal Weight ETF

The SPDR S&P MidCap 400 ETF invests based on the S&P MidCap 400 Index. The Invesco S&P MidCap 400 Equal Weight ETF invests based on the S&P MidCap 400 Equal Weight Index. The article compares MDY against EWMC in terms of allocations, risk factors and returns experienced by investors.

EWMC: Equal Weighting Gains Investors Little Compared To MDY

The SPDR S&P MIDCAP 400 ETF Trust (MDY) is a large ETF targeting the mid-cap blend sector, with over $20 billion in assets. MDY has been volatile and in a downtrend relative to the S&P 500 for over a decade, but its low expense ratio makes it a cost-effective choice. Mid-caps may be in a longer-term sweet spot with less idiosyncratic risk, but past recessions have resulted in significant declines in MDY's value.

MDY: A Time For Lowered Tech Exposure And Mid-Caps

iShares Core S&P Mid-Cap ETF

iShares Core S&P 500 ETF

iShares Russell Midcap ETF

Schwab U.S. Mid-Cap ETF

Vanguard Mid-Cap ETF

It's been an impressive 2023 for U.S. large-cap equities. The iShares Core S&P 500 ETF (IVV) had risen 19% as of July 24, with consumer discretionary and information technology stocks leading the way.

Chart of the Week: Mid-Cap ETFs in Focus

The S&P Midcap 400 ETF Trust offers exposure to mid-cap firms with growth potential, financial stability, and steady dividend income. Large-cap equities have outperformed mid-cap equities recently, but a long-term outlook suggests diversification with mid-cap firms is beneficial. The ETF has a low expense ratio of 0.23%, making it a cost-effective investment option for those seeking to diversify their portfolio.

MDY Poised To Outperform Large Caps Starting Now

JPMorgan Equity Premium Income ETF

iShares Exponential Technologies ETF

Technology stocks have been and continue to be market-leading names for good reason. But not every tech stock is worth owning.

3 ETFs That Can Supercharge Your Retirement Savings

MDY: Valuation Is Low And It Is Time To Accumulate.

MDY: Valuation Is Low And It Is Time To Accumulate

Dimensional US Small Cap ETF

Principal U.S. Small-Cap Multi-Factor Index ETF

Schwab U.S. Small-Cap ETF

These riskier funds pulled in more than $2 billion last month.

Small, Midcap Equity ETFs May Boost Portfolios

iShares Core S&P Small Cap ETF

SPDR S&P 600 Small Cap ETF

Vanguard S&P Small-Cap 600 ETF

A $1.8 billion fund will be merged into a $5.2 billion fund.

State Street to Merge Small Cap ETFs into $7B Behemoth

The SPDR S&P MidCap 400 ETF invests based on the S&P MidCap 400 Index. The SPDR S&P 500 ETF invests based on the S&P 500 Index.

MDY Vs. SPY: Skipping The Crowd Has Benefits

iShares MSCI China ETF

Invesco S&P 500 Pure Value ETF

Contrary to common belief, you don't have to trade individual stocks to outperform the overall stock market.

4 Index Funds I Predict Will Beat the Market in 2023

Invesco S&P SmallCap 600® Equal Weight

Invesco S&P 500 Equal Weight ETF

SPDR S&P 600 Small Cap Growth ETF

Equal-weight ETFs do a great job in managing single-security risk, thanks to their equal allocation in the entire spectrum of market-capitalization levels, regardless of size.

Equal-Weight ETFs Win Over Market-Cap Peers in 2022

Equal-weighted ETFs are outperforming their market-cap counterparts.

Equal-Weight ETFs Outperforming

263k jobs were created last month while the unemployment rate ticked up. Average hourly earnings remain well below the inflation rate.

Markets Steady Following A Warm October Jobs Report - MDY Continues To Outperform

Ameriprise Financial

ETRADE

iShares North American Tech-Software ETF

iShares PHLX Semiconductor ETF

Vanguard Large-Cap ETF

Financial Select Sector SPDR Fund

Technology Select Sector SPDR Fund

If you had a crystal ball that told you what the stock market is going to do, how would you use it? To pick investments, right?

How To Exploit Stock Market Rise In Midterm Election Years

Equal-weight ETFs limit the risk of a severe downfall in any particular security, providing a nice balance in the portfolio.

Equal-Weight ETFs Beating Market-Cap Peers This Year

iShares Russell Mid-Cap Value ETF

Investors who look to cash in on the strong fundamentals but seem unnerved about the prevalent uncertainties should bank on the mid-cap ETFs.

Consider Mid-Cap ETFs to Navigate Market Upheavals

ProShares S&P 500 Dividend Aristocrats ETF

iShares MSCI USA Quality Factor ETF

Invesco S&P 500 High Dividend Low Volatility ETF

Vanguard Health Care ETF

Let's discuss some ETF options as market participants worry about the U.S. economy moving into recession due to the inversion of the yield curve amid high inflation levels and the war crisis.

Tap on These 5 ETFs as Recession Fears Grip Wall Street

Investors seeking to capitalize on the strong fundamentals but worried about uncertainty should consider mid-cap ETFs.

News for SPDR S&P Midcap 400 ETF Trust ETF (MDY)