SPTM ETF

SPTM provides extensive access to the US market by focusing on all key market size categories. While the positive outlook for such funds is strong due to potential future interest rate cuts, investors need to evaluate the existing risks before investing or increasing their stake in this ETF. In this article, I will discuss these points and suggest some alternatives for those looking for a more cautious approach or different long-term investment options.

The SPDR Portfolio S&P 1500 Composite Stock Market ETF includes 1,500 U.S. stocks in the S&P 500, S&P 400 and S&P 600 indices. As the Federal Reserve lowers its key interest rate, SPTM should benefit, as it also includes small-cap and mid-cap stocks. Small-cap and mid-cap stocks in SPTM's portfolio have lower valuations and better earnings growth potential than the S&P 500 index.

The global trade and shipping industry has been affected by the Red Sea crisis, resulting from attacks on commercial vessels by Houthi militants. Shipping costs and transit times have risen, especially on routes connecting Asia and Europe. The impact on the US market is expected to be minimal as its trade routes are less affected.

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.

Consider investing in the SPDR® Portfolio S&P 1500 Composite Stock Market ETF for exposure to a diversified portfolio of U.S. stocks across all market capitalizations. The SPTM ETF has a low expense ratio of 0.03% and holds top positions in companies like Apple, Microsoft, and Amazon. The ETF offers comprehensive exposure to the U.S. equity market, but its performance is subject to market volatility.