The State Street SPDR Portfolio S&P 600 Small Cap ETF (SPSM) was launched on July 8, 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.
The fund is sponsored by State Street Investment Management. It has amassed assets over $17.09 billion, making it one of the largest ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.03%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.38%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector -- about 18.9% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Viasat Inc (VSAT) accounts for about 0.63% of total assets, followed by Corcept Therapeutics Inc (CORT) and Glaukos Corp (GKOS).
The top 10 holdings account for about 5.22% of total assets under management.
Performance and Risk
SPSM seeks to match the performance of the Russell 2000 Index before fees and expenses. The S&P SmallCap 600 Index is designed to measure the performance of the small-capitalization segment of the U.S. equity market.
The ETF has gained about 22.55% so far this year and was up about 25.02% in the last one year (as of 08/28/2026). In the past 52-week period, it has traded between $43.68 and $58.48.
The ETF has a beta of 1.02 and standard deviation of 19.82% for the trailing three-year period. With about 610 holdings, it effectively diversifies company-specific risk.
Alternatives
State Street SPDR Portfolio S&P 600 Small Cap ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPSM is an excellent option for investors seeking exposure to the Style Box - Small Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Morningstar Small-Cap ETF (VB) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While Vanguard Morningstar Small-Cap ETF has $82.26 billion in assets, iShares Core S&P Small-Cap ETF has $110.91 billion. VB has an expense ratio of 0.03% and IJR charges 0.06%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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State Street SPDR Portfolio S&P 600 Small Cap ETF (SPSM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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