XMHQ - SPTM: A Solid But Unnecessary Total Market ETF
2024-03-08 13:00:22 ET
Summary
- SPTM tracks the S&P 1500 Composite Index, providing investors with low-cost exposure to approximately 90% of the U.S. stock market.
- An initial profitability screen means SPTM is a higher-quality ETF than competitors like VTI and ITOT. Only 2.45% of the portfolio by weight reported net losses last year.
- The downside is a slightly lower growth rate, but SPTM is also less volatile and trades marginally lower, so I believe it will win out over the long run.
- Still, the outperformance will likely be small, as SPTM even has a 92% overlap with S&P 500 Index ETFs. A better approach is to use market-cap-weighted funds for large-cap stocks, paired with factor-focused ETFs for the remainder.
- This article evaluates the performance and fundamentals for all four ETFs and offers some suggestions in the small and mid-cap space to help you build a winning portfolio.