Key Points: The State Street SPDR Portfolio S&P 600 Small Cap ETF (SPSM) and Vanguard Small-Cap ETF (VB) both target U.S. small-cap stocks, with VB holding more companies and delivering stronger total returns over the past year. SPSM is more cost-effective. Both ETFs tilt towards industrials and technology, but their top holdings and sector weights differ. Investors seeking diversified exposure beyond large caps may find these low-cost options appealing.

Snapshot: VB tracks a broad small-cap index with 1,357 stocks, while SPSM holds 607 companies. VB has a 0.05% expense ratio and $163 billion in assets, while SPSM’s expense ratio is 0.03% with a smaller $13 billion asset base.

What this means for investors: Small-cap stocks offer high-growth potential and volatility. VB offers wider diversification and easier trading, while SPSM provides a tighter portfolio at a lower cost. VB leans towards industrials, while SPSM allocates more to financials. Choose based on preference for diversification or cost efficiency.

Glossary: ETFs are exchange-traded funds that hold a basket of securities. Expense ratio is the annual fund operating cost as a percentage of assets. Beta measures volatility. AUM is assets under management. Total return includes price changes and dividends. Small-cap stocks have smaller market capitalizations. Sector weight is the percentage of a portfolio in a specific sector. Replication involves holding the same securities as an index.

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Read more at Nasdaq: VB vs. SPSM Small-Cap Showdown: Maximum Reach or Strategic Focus?