Let’s find out the details of an ETF that has recorded incredible performance over the last 3 years. In this article, we study the main aspects and characteristics.
Over the past three years, this ETF has demonstrated exceptional performance, with an impressive +81% return.
This result has attracted the attention of investors who wish to delve deeper into the key characteristics of this ETF to evaluate its potential as a component of an investment strategy.
SPDR MSCI USA Small Cap Value Weighted
The current size of the ETF is approximately EUR 379 million, which can be considered a significant size, although not among the largest in the ETF landscape. This offers a good degree of liquidity, meaning investors can trade with relative ease without the risk of "slippage" while trading.
Spending and Replication Indicators
The synthetic cost indicator (TER) of the ETF is equal to 0.30% per annum. This expense rate is considered competitive compared to other similar ETFs. It indicates the annual cost associated with investing in this fund and includes expenses such as periodic rebalancing and operating costs.
The ETF uses a physical replication strategy with optimized sampling to track the performance of the benchmark index, the MSCI USA Small Cap Value Weighted. This means that instead of buying all the securities in the index, the ETF selects only the most relevant components, thus reducing management costs. This approach is designed to replicate the performance of the underlying index efficiently and economically but is certainly less "faithful" than full physical replication.
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Distribution and Dividend Policy
The ETF follows an accumulation policy and the dividends generated by the underlying stocks are reinvested in the ETF rather than being distributed to investors. This can be advantageous for long-term investors who want to maximize the growth potential of their investment, as reinvested dividends help compound capital over time.
Geographical Exposure and Sectors
The ETF has broad exposure to the United States, with 93.73% of the portfolio concentrated in this market. This positions the ETF as a US-focused investment, and investors should be aware of this geographic exposure. However, the United States represents one of the largest and most diverse economies in the world, offering many investment opportunities.
In terms of sectors, the ETF shows adequate diversification. Sectors with the greatest exposure include Finance, Consumer Discretionary, and Industrials. This diversification can help reduce sector-specific risk, as the ETF is exposed to different areas of the U.S. economy.
Performance and returns
One of the strengths of this ETF is its remarkable performance over the last three years, with an increase of +81%. This achievement was fueled by a rising U.S. stock market and an investment strategy that seeks to capture the value of small-cap and low-price-to-earnings companies.
However, it is crucial to remember that past performance does not guarantee future returns, and investing in stocks always involves some degree of risk. Investors should carefully consider their risk tolerance and long-term investment strategy before making a decision.
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Risk and Volatility
The 1-year volatility of the ETF was 21.09%, which indicates the variability of returns over a year. This volatility is common in equity investments and reflects the price fluctuations of the underlying shares in the ETF. It should also be noted that the ETF recorded a maximum 5-year drawdown of -46.52%, which represents the maximum loss recorded during this period. This highlights the importance of understanding the risk associated with investing in stocks and being prepared for periods of loss.
Conclusions
In conclusion, the SPDR MSCI USA Small Cap Value Weighted UCITS ETF offers impressive performance and competitive costs. However, investing in stocks involves risks, and investors should be aware of market fluctuations and the potential for loss. This ETF can be an attractive component of a broader investment strategy, but it is important to conduct additional research, carefully evaluate your financial situation, and consider your investment objective before making an investment decision. Its physical replication strategy with optimized sampling and dividend accumulation policy can meet the needs of different types of investors.
|Disclaimer
The information and considerations contained in this article should not be used as the sole and principal basis on which to make investment decisions. The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation for public savings.|
Original article published on Money.it Italy 2023-12-16 18:02:00. Original title: +81% per questo ETF negli ultimi 3 anni
