Vanguard (VB) vs. State Street (SPSM) in a Small-Cap ETF Showdown
VB offers broader diversification with 1,357 holdings, while SPSM focuses on 607 concentrated picks. Both charge 0.03% but differ in sector exposure and recent returns.
Overview
Vanguard Morningstar Small-Cap ETF (NYSEMKT:VB) offers significantly broader diversification across 1,357 holdings, while State Street SPDR Portfolio S&P 600 Small Cap ETF (NYSEMKT:SPSM) focuses on a more concentrated selection of 607 smaller companies.
Small-cap ETFs offer growth potential by capturing the "small-firm effect," in which smaller companies may outperform larger peers over long investment horizons. While both of these funds aim for low-cost exposure, they track different indexes -- the CRSP U.S. Small Cap Index versus the S&P SmallCap 600 Index -- resulting in distinct portfolios and risk profiles.
Details
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Source
Originally published at www.fool.com.