S&P 600 Index ETF Investment Overview

The S&P 600 Index ETF is a great option for investors looking to tap into the US small-cap market. It tracks the S&P 600 Index, which consists of 600 of the smallest US companies.

These small-cap companies are often overlooked, but they can provide a high level of diversification and growth potential. The S&P 600 Index is a market-capitalization-weighted index, meaning the largest companies in the index have a greater impact on its performance.

Investing in the S&P 600 Index ETF can be a cost-effective way to gain exposure to this market. The ETF typically has lower fees compared to actively managed funds.

The Invesco S&P SmallCap Quality ETF invests at least 90% of its total assets in securities that comprise the S&P SmallCap 600 Quality Index.

The Index is composed of 120 securities in the S&P SmallCap 600 Index that have the highest quality score, which is calculated based on the average of three fundamental measures: return on equity, accruals ratio, and financial leverage ratio.

The S&P 600 Index is float-adjusted and market capitalization weighted, making it a reliable benchmark for small cap US equities.

To give you a better idea of the S&P 600 Index ETFs, here are some key features:

The Index is rebalanced and reconstituted semi-annually on the third Friday of June and December, ensuring that the ETF stays aligned with the underlying Index.

The S&P 600 Index ETF has a notable performance history, and it's worth taking a closer look.

The growth of $10,000 invested in the S&P 600 Index over the past 10 years is a remarkable story.

An investor who put $10,000 into the Index 10 years ago would have seen their investment grow significantly, but it's essential to note that this is just a hypothetical scenario.

The results assume that no cash was added to or assets withdrawn from the Index, which is not a realistic expectation for most investors.

When investing in an S&P 600 index ETF, it's essential to consider the fees and costs involved. The cheapest USA small cap ETF by total expense ratio is the Invesco S&P SmallCap 600 UCITS ETF A, with a total expense ratio of 0.14% p.a.

Two other ETFs, the JPMorgan BetaBuilders US Small Cap Equity UCITS ETF USD (acc) and the UBS ETF (IE) MSCI USA Small Cap ESG Leaders UCITS ETF (USA) A-acc, also have a total expense ratio of 0.14% p.a.

These three ETFs are the top options for those looking to minimize their costs.

The S&P 600 Index ETF is a popular investment option for those looking to tap into the small-cap market in the US. It's based on the S&P SmallCap 600 Index, which consists of the 600 smallest companies from the S&P 1500 Composite index.

The index is rebalanced quarterly, which means that the composition of the index is adjusted every three months to ensure it remains representative of the small-cap market. This ensures that the ETF remains aligned with the underlying index.

Here are some key facts about the S&P 600 Index ETF:

The S&P 600 Index ETF is designed to track the performance of the S&P SmallCap 600 Index, which means that its returns should be closely aligned with the index. This makes it a popular choice for investors looking to gain exposure to the small-cap market in the US.

The S&P 600 Index ETF has a sector allocation that's worth taking a look at. The largest sector in this fund is UnClassified, making up a whopping 83.32% of the fund.

The remaining sectors are allocated as follows: Industrials (6.63%), Consumer Discretionary (2.85%), Health Care (2.51%), Financials (1.38%), Energy (1.30%), Information Technology (0.98%), Consumer Staples (0.52%), Materials (0.48%), and Investment Companies (0.02%).

Here's a breakdown of the top 3 sectors in the fund:

Small cap stocks in the USA can be a great way to diversify your portfolio and potentially earn higher returns.

There are several indices available to track these stocks, including the Russell 2000, MSCI USA Small Cap, and S&P SmallCap 600.

The S&P SmallCap 600 index specifically includes 600 small cap US stocks from the S&P 1500 Composite index.

Companies must have an unadjusted market cap of $600 million to $2.4 billion to be included in the S&P SmallCap 600 index.

These stocks are weighted by their free float market capitalization.

ETFs are a popular way to invest in these small cap stocks, and there are several options available that track the Russell 2000, MSCI USA Small Cap, and S&P SmallCap 600 indices.

Sectors represented in these small cap stocks include Energy, Healthcare, Information Technology, and Real Estate.

The sector allocation of a portfolio is a crucial aspect to consider. It determines how your investments are distributed across different industries.

The majority of this fund, 83.32%, is allocated to the Unclassified sector. This means that a significant portion of the portfolio's assets are not specifically categorized into a particular industry.

Another notable sector is Industrials, which accounts for 6.63% of the fund. This suggests that the portfolio has a moderate presence in the industrial sector.

Here's a breakdown of the sector allocation:

Consumer Discretionary and Health Care sectors account for 5.36% of the fund combined, indicating a moderate presence in these industries.

The S&P 600 Index ETF has a history of regular distributions, with the first one occurring on December 20, 2021, with a distribution amount of $0.24784 per share.

The distribution amounts vary, with the highest being $0.20813 per share on December 19, 2022, and the lowest being $0.00486 on December 26, 2018, which was a short-term gain distribution.

Here's a breakdown of the distribution amounts over the past few years:

These distributions provide a way for investors to receive a portion of the fund's earnings, and can be a useful tool for those looking to generate income from their investments.

Distributions can be a complex topic, but let's break it down.

Distributions are typically paid out on a quarterly basis, with the exact dates varying from one distribution to another. For example, the distribution on December 23, 2024 has an Ex-Date of December 23, 2024, a Record Date of December 23, 2024, and a Pay Date of December 27, 2024.

The amount of the distribution can vary significantly from one quarter to another. In 2022, the distribution on December 19 was $0.20813 per share, while the distribution on June 21 was $0.16632 per share.

The distribution is usually made up of ordinary income, with some distributions also including short-term gains, long-term gains, return of capital, or liquidation distribution. However, not all distributions include these components. For instance, the distribution on June 24, 2019 was $0.09270 per share, which was entirely ordinary income.

Some distributions are also accompanied by a return of capital, which is essentially a repayment of the investor's initial investment. This happened in 2018, when the distribution on December 26 included a return of capital of $0.00486 per share.

Here's a breakdown of the distribution components for each quarter since 2018:

Keep in mind that this is not an exhaustive list, and you should always check the specific distribution details for each quarter.

The Morningstar Rating is a key metric to consider when evaluating a fund's performance. As of 11/30/24, the rating reflects historical risk-adjusted performance.

Past performance is no guarantee of future results, but the rating can give you an idea of how a fund has performed in the past. This rating is based on a weighted average of the fund's 3, 5 and 10 year metrics.

The ratings are calculated using a complex algorithm that takes into account various factors, including risk and return. The overall rating is a summary of these calculations.

Morningstar Rating metrics include 3, 5 and 10 year metrics, which are used to calculate the overall rating. These metrics are based on historical data and are intended to provide a snapshot of a fund's past performance.

The S&P 600 Index ETF carries inherent risks, including possible loss of money, due to its tracking of the S&P SmallCap 600 Index, which measures the investment return of small-capitalization stocks in the United States.

Investments in small-capitalization companies, like those tracked by the S&P 600 Index, are more vulnerable to adverse developments, may be more volatile, and may be illiquid or restricted as to resale than large companies.

The Fund may become "non-diversified" as a result of a change in relative market capitalization or index weighting of one or more constituents of the Index, which could impact its performance.

The following risks are associated with investments in the S&P 600 Index ETF:

Investing in ETFs comes with risks, including the possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks.

Investing in small-capitalization companies can be particularly volatile, as these stocks tend to be more vulnerable to adverse developments.

Investments focused in a particular sector, such as financials, are also subject to greater risk and are more greatly impacted by market volatility.

The Fund may become "non-diversified" due to a change in relative market capitalization or index weighting of one or more constituents of the Index.

Past performance is no guarantee of future results, and the value and income derived from investments may go down as well as up.

The fund strategy of the investment is designed to track the performance of the S&P SmallCap 600 Index, which measures the investment return of small-capitalization stocks in the United States.

The advisor employs an indexing investment approach, attempting to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index.

The fund holds each stock in approximately the same proportion as its weighting in the index, providing a transparent and diversified investment portfolio.

One unique feature of the fund is its use of ETFs, which offer investors an interest in a portfolio of securities and other underlying assets, similar to mutual funds.

The fund's holdings are disclosed on a daily basis, allowing investors to see the underlying portfolio securities and make informed investment decisions.

The advisor's goal is to provide investors with a low-cost and efficient way to gain exposure to the S&P SmallCap 600 Index, with the aim of replicating its performance over time.

Here's a breakdown of the fund's holdings and performance:

The fund's performance is evaluated over various time periods, including 1, 5, and 10 years, with the aim of providing investors with a comprehensive view of its long-term potential.

The fund's quarterly total return as of 09/30/2024 shows an annualized return of +25.8% over the past 5 years, outperforming its Morningstar category and the S&P 500 TR USD broad-based index.