SMLV Profile
The SPDR SSGA U.S. Small Cap Low Volatility Index ETF aims to provide investors with exposure to U.S. small-cap stocks that exhibit lower volatility relative to their peers. The fund strategically allocates at least 80% of its total assets to the securities included in the SSGA U.S. Small Cap Low Volatility Index. This index focuses on small-cap companies in the U.S. equity market that demonstrate lower price fluctuations compared to other small-cap stocks.
The underlying index is specifically designed to track the performance of small-cap stocks with lower volatility, offering a unique approach to investing in the small-cap segment. Low volatility stocks are characterized by smaller price swings and less fluctuation in value, which can provide a stabilizing effect on the fund’s performance. By targeting these stocks, the ETF aims to reduce the impact of market volatility and provide a smoother investment experience for its shareholders.
The investment strategy of the fund involves selecting and holding a representative sample of stocks from the index. These small-cap companies are identified based on their lower volatility characteristics, which are measured by the magnitude of their price movements over time. This focus on low volatility stocks allows the fund to potentially offer more consistent returns compared to a traditional small-cap equity strategy, which may be subject to higher fluctuations.
The SPDR SSGA U.S. Small Cap Low Volatility Index ETF is designed for investors who seek to benefit from the growth potential of small-cap stocks while aiming to mitigate some of the risks associated with higher volatility. The fund’s non-diversified nature means it holds a concentrated portfolio of low volatility small-cap stocks, which may lead to increased sensitivity to changes in the small-cap segment of the market. As such, it is well-suited for investors looking for a more stable approach to small-cap investing while accepting the inherent risks of focusing on a specific volatility characteristic.
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