SPDR Portfolio S&P 500 Growth ETF SPYG constructs a market-cap-weighted portfolio of fast-growing U.S. large-cap stocks with a low fee. Despite being top-heavy, the fund accurately represents the large-cap growth opportunity set and comes with a fee advantage that should translate into sound category-relative performance. It earns a Morningstar Analyst Rating of Silver.

This exchange-traded fund replicates the S&P 500 Growth Index, which selects faster-growing large-cap stocks and weights them by market cap. Its holdings tend to be established growth companies with durable competitive advantages. These firms may not be able to grow as quickly as their smaller counterparts, but they are more stable. But these firms may not live up to the expectations embedded in their higher valuations, which could hurt performance.

U.S. large-cap stocks attract liquidity and widespread attention, such that new information is quickly reflected in prices. Market-cap weighting is a sensible approach here. It harnesses the market’s collective wisdom of the relative value of each holding.

The fund accurately mimics the contours of its average peer. The fund's sector allocations did not deviate by more than 7% from the category average, as of March 2023. However, the fund’s December 2022 rebalance resulted in added exposure to energy at the expense of its allocation to technology stocks, after they tumbled in 2022. Index providers’ different approaches to growth have led to a divergence in portfolios of historically similar growth ETFs. The recent changes do not change our long-term expectations, but it bears monitoring. 

The fund trades at a similar valuation as its typical peer. Despite its top-heavy portfolio, the fund still has a lower average market cap than the category average. Furthermore, the fund includes blend stocks that help diversify the fund along the value-growth spectrum. These stocks can aid its performance when growth stocks underperform.

Analyst Rating

Cheap Exposure to Growth

Associate Analyst

Mo'ath Almahasneh

Apple

Microsoft

NVIDIA

Alphabet

Tesla

Amazon

UnitedHealth Group

Eli Lilly

Exxon Mobil

This market-cap-weighted portfolio accurately represents the large-growth opportunity set and effectively channels the market’s collective wisdom to weight holdings. It earns an Above Average Process Pillar rating.

This fund tracks the S&P 500 Growth Index, which starts by calculating a value-growth composite score for each stock in the S&P 500. The growth score is based on stocks’ 12-month price change, three-year sales per share growth, and three-year change in earnings yield per share. Then, each stock is assigned into either the S&P Value or S&P 500 Growth index. Stocks exhibiting less-pronounced growth or value traits are then allocated to each index based on the relative strength of their traits until each index reaches half of the S&P 500 market cap. The index weights stocks by market cap and implements value-growth score buffers to limit turnover. The index is reconstituted annually.

Above Average

Process

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. State Street Global Advisors' GEBS team's global footprint, trading, and risk management processes enable low transaction costs and tight index tracking, supporting an Above Average People Pillar rating.

Michael Feehily, Karl Schneider, and Mark Krivitsky are the named managers on this fund. Feehily is the co-head of the GEBS team. Feehily has been with State Street since 1992 and joined SSGA in 2010.

Schneider is a managing director of SSGA and the deputy head of GEBS for the Americas region. He has been with SSGA since 1997. Krivitsky joined SSGA in 1996 and has been a named manager on this fund since October 2017.

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.

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 S&P 500 Growth ETF

SPYG tracks an index of primarily large-cap growth stocks. The index selects companies from the S&P 500 Index based on three growth factors.

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Hello! For this week's ETF Wrap, I spoke to Michael Arone, chief investment strategist for the U.S. SPDR business at State Street Global Advisors, for his view of markets and where ETF investors may look for opportunities at this stage of the Federal Reserve's interest rate-hiking cycle.

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In the first half of 2023, Wall Street delivered an upbeat performance, with the S&P 500, the Nasdaq and the Dow Jones gaining about 14%, 29.5% and 2.4%, respectively. Better-than-expected corporate earnings and the AI boom were the key trends in the first half.

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If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the SPDR Portfolio S&P 500 Growth ETF (SPYG), a passively managed exchange traded fund launched on 09/25/2000.

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Good Morning, VettaFi Voices! Growth has blown value out of the water in 2023. It's not even close. The Vanguard Value ETF (VTV) is up less than 1% year to date. Meanwhile, the Vanguard Growth ETF (VUG), the growth fund, is up 32%. That's a big difference, and clearly we're in a growth regime.

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SPDR® Portfolio S&P 500 Growth ETF has generated significant returns and is expected to continue its rally. Robust economic growth, slowing inflation, and solid earnings growth potential support investor confidence in growth stocks. SPYG offers better risk-adjusted returns compared to other ETFs due to its diversified portfolio and lower risk factor.

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The consumer price index rose by 3.2% year over year in July. However, this was slightly below the anticipated 3.3% forecast.

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The SPDR S&P 500 growth ETF is largely a technology-focused fund due to the majority of growth stocks being in this sector; it's currently in a period of overvaluation. The fund has tracked its index well, outperforming it in 2020 and 2022, but is underperforming so far in 2023; it's rated as a buy by Seeking Alpha's Quant rating system. Despite its merits, SPYG is outperformed by alternative funds such as QQQ, SCHG, and IWF, with QQQ performing the best.

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State Street Global Advisors' SPDR Portfolio S&P 500 Growth ETF is a cost-efficient fund that has a strong long-term performance track record. The fund focuses on the S&P500's strongest companies based on a variety of growth metrics. Over the past decade, SPYG has outperformed the Vanguard S&P500 by over-weighting growth stocks like Apple, Microsoft, Nvidia, META, and Google.

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Large-cap growth ETFs continue to lead large-cap value ones in 2023. Through May 16, the iShares Russell 1000 Growth ETF (IWF) was up 16%, beating the iShares Russell 1000 Value ETF (IWD) by 1,700 basis points year-to-date.

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Bank of America

Chevron

DaVita

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Snowflake

StoneCo

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The growth factor has underperformed through 2022 and is still more expensively valued, compared to value stocks. SPYG offers an inexpensive, proven option for investors looking to gain growth exposure.

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Earnings for the fourth quarter and improving economic trends suggest that growth corporations will likely perform well in 2023. Numerous fundamental and technical factors suggest that the uptrend is likely to continue and that the worst is already behind us.

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If Vanguard's predictions are right, those future asset returns likely aren't what investors are hoping for. The post Vanguard Predicts Stock Returns — You're Not Going To Like Them appeared first on Investor's Business Daily.

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News for SPDR Portfolio S&P 500 Growth ETF ETF (SPYG)