SPDR Portfolio S&P 1500 Composite Stock Market ETF SPTM effectively combines a broadly diversified portfolio of U.S. stocks with low turnover and a minuscule price, providing it with a durable edge over peers.

The fund tracks the S&P Composite 1500 Index, which is a market-cap weighted basket of the constituents of S&P 500, S&P MidCap 400, and S&P SmallCap 600 indexes. It constitutes 90% of the investable U.S. equity market. Rather than index rules dictating construction, an index committee has discretion over selecting stocks that meet certain liquidity, size, and profitability thresholds. 

The largest stocks in the United States attract liquidity and widespread attention, such that new information is quickly reflected in their prices. Market-cap weighting is a sensible approach here. It harnesses the market’s collective wisdom of the relative value of each holding and promotes diversification with the added benefit of low turnover and associated trading costs. 

However, market-cap weighting may expose the index to significant stock- or sector-level concentration during the market’s intermittent manic episodes. This can tilt the portfolio toward richly valued names or sectors, as was the case during the post-lockdown rally in 2020. In the long run, the benefits of broad diversification, low turnover, and a low fee outweigh this drawback.

Analyst Rating

Cheap exposure to the broader market.

Associate Analyst

Mo'ath Almahasneh

Microsoft

Apple

NVIDIA

Amazon

Alphabet

Berkshire Hathaway Inc. - Ordinary Shares - Class B

Eli Lilly

JPMorgan Chase & Co

This broadly diversified portfolio is representative of the U.S. equity market. It leverages the market’s collective wisdom to size its positions and enjoys low turnover as a result. It earns a High Process Pillar rating.

The fund replicates the S&P Composite 1500 Index, which combines stocks in the S&P 500, S&P MidCap 400, and S&P Small Cap 600 indexes into one index. Stocks must pass the index committee’s liquidity, size, and profitability screens. The profitability screen requires that the sum of a company’s GAAP earnings over the past four quarters be positive as well as the most recent quarter. Once the index committee selects stocks, it weights them by market cap. While a committee-based approach lacks transparency, it adds flexibility to reduce unnecessary changes during reconstitution. This has the potential to tame transaction costs compared with more-rigid rules-based indexes.

High

Process

State Street Global Advisors' global footprint, trading, and risk management processes enable low transaction costs and tight index tracking, supporting an Above Average People Pillar rating.
This portfolio is managed by SSGA’s Global Equity Beta Solutions, the same team that manages State Street’s other equity index funds, under the leadership of Michael Feehily. Feehily, Karl Schneider, and Kathleen Morgan are the named managers on this portfolio. Feehily and Schneider have been with SSGA since 1997 and are the head and deputy head of the GEBS team, respectively. Morgan is a senior portfolio manager with the GEBS team who joined the firm in 2017 and started working on the strategy in 2018.
The managers' objectives are to mitigate tracking error, transaction costs, and the tax consequences of their trades. A team of analysts helps the managers effectively track the index by anticipating index changes and corporate actions. The management team’s compensation is tied to index-tracking performance, operational efficiency, and contribution to process improvement, which aligns their interest with investors'. The team is subject to independent risk oversight.

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 Portfolio Total Stock Market ETF

SPTM tracks a market-cap-weighted index selected by the S&P Committee that covers the entire US market cap spectrum.

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SPTM tracks the S&P 1500 Composite Index, providing investors with low-cost exposure to approximately 90% of the U.S. stock market. An initial profitability screen means SPTM is a higher-quality ETF than competitors like VTI and ITOT. Only 2.45% of the portfolio by weight reported net losses last year. The downside is a slightly lower growth rate, but SPTM is also less volatile and trades marginally lower, so I believe it will win out over the long run.

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Consider investing in the SPDR® Portfolio S&P 1500 Composite Stock Market ETF for exposure to a diversified portfolio of U.S. stocks across all market capitalizations. The SPTM ETF has a low expense ratio of 0.03% and holds top positions in companies like Apple, Microsoft, and Amazon. The ETF offers comprehensive exposure to the U.S. equity market, but its performance is subject to market volatility.

SPTM: Good To Get Mid And Small-Cap Exposure

Archer-Daniels-Midland Company

Johnson & Johnson

McDonald's

PepsiCo

Pfizer

QUALCOMM

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Target

T. Rowe Price Group

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Exxon Mobil

Bert and his wife received $3,570.87 in September dividend income. This was a 16.52% dividend increase compared to September 2022. The stock and ETF split in the month of September was 45% ETF to 55% stock. Through investment in DRIP and dividend increases, Bert saw his income grow significantly for some of his positions.

Bert's September Dividend Income Summary

SPDR Portfolio S&P 1500 Composite Stock Market ETF is a low-cost ETF that provides comprehensive exposure to the US equity market. SPTM has a mix of large-cap, mid-cap, and small-cap stocks across various sectors, with a focus on technology, financial, healthcare, and industrial sectors. The fund has generated strong total returns and has a diversified portfolio, making it attractive for long-term growth-seeking investors. However, it has a low yield and is currently trading at a marginal premium.

SPTM: Low-Yielding S&P-Based Diversified Portfolio In Sync With Broader Market

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This ETF trading model uses the Conference Board Leading Economic Index to determine “Risk-On” periods for equities. A universe is defined from the SPDR, Vanguard, and PowerShares ETF providers for the sectors healthcare, energy, communication, technology, and general multi-sector funds, holding large-mega cap stocks from the United States.

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SPTM's portfolio represents about 90% of the investable U.S. equity market. The fund's valuation appears to be moderately expensive.

SPTM: Valuation Still Moderately Expensive

The Vanguard Total Stock Market ETF invests based on the CRSP US Total Market Index. The SPDR Portfolio S&P 1500 Composite Stock Market ETF invests based on the S&P Composite 1500 Index.

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SPTM invests in accord with the wide and varied S&P Composite 1500 index, the fund's benchmark. The fund is fairly priced, but with a positive IRR of 8-9% by my more conservative estimations.

SPTM: A Diversified U.S. Equity Fund With Promising Potential Returns

iShares Core S&P Total U.S. Stock Market ETF

The SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM) is based on the S&P Composite 1500 Index. Holding more than twice the stocks than SPTM, the iShares Core S&P Total U.S. Stock Market ETF (ITOT) is based on the S&P Total Market Index, which has 4200 stocks.

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SPTM is a $5.7 billion fund with a mixed equity blend that is supposed to encompass all three echelons of the U.S. market. With an expense ratio of just 3 bps, SPTM is one of the cheapest passively managed ETFs available to U.S. investors.

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News for SPDR Portfolio Total Stock Market ETF ETF (SPTM)