Small-cap stocks have underperformed the large caps in the past year. SPDR Portfolio S&P 600 Small Cap ETF SPSM has gained 9.8% in the past year (as of Jan. 6, 2025) versus 25.4% gains in the SPDR S&P 500 ETF Trust ETF SPY.
The SPDR Portfolio S&P 600 Small Cap ETF (SPSM) was launched on 07/08/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
I recommend buying SPDR® Portfolio S&P 600™ Small Cap ETF due to the expected positive impact of Trump's tax cuts on small-cap companies. Historical data shows stocks typically rise from November to the presidential inauguration, supporting stock exposure despite high market valuations. Small-cap companies are likely to benefit most from Trump's policies and currently trade at a discount to their 10-year average P/E.
If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the SPDR Portfolio S&P 600 Small Cap ETF (SPSM), a passively managed exchange traded fund launched on 07/08/2013.
I maintain a buy rating on SPSM due to its attractive valuation, solid diversification, and bullish technical indicators, despite some historical underperformance post-Fed rate cuts. SPSM offers low-cost, comprehensive exposure to small-cap US equities with a low 0.03% expense ratio and a compelling PEG ratio under 1.5. The ETF's sector allocation provides diversification benefits, with significant weights in Financials, Industrials, and Real Estate, and less exposure to Information Technology.
Small-cap stocks are trading at a massive valuation discount relative to the S&P 500. Falling interest rates could be the catalyst that leads to significant outperformance.
The current bull market has favored the biggest companies in the world, while small companies are left behind. Investors started a historically strong rotation into small-cap stocks in July.
Lower interest rates could be a boon for small-cap stocks. Artificial intelligence is a fortune-building megatrend.
July saw minimal growth for the S&P 500, but smaller companies saw their share prices soar. The shift to small caps may be just getting started as the money supply grows and the valuation gap remains high.
Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the SPDR Portfolio S&P 600 Small Cap ETF (SPSM), a passively managed exchange traded fund launched on 07/08/2013.
SPSM underperformed mid-cap and large-cap peers in the past 2 years. Earnings growth expected to improve significantly in 2025 and 2026. SPSM's forward P/E ratio is attractive, but may still lag behind the S&P 500 index in the long run.
VettaFi's Head of Research Todd Rosenbluth discussed the SPDR Portfolio S&P 600 Small Cap ETF (SPSM) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” The pair talked about several topics regarding the fund to give investors a deeper understanding of the ETF overall.