What Is SPSM? State Street SPDR Portfolio S&P 600 Small Cap ETF
Last updated September 2026
Short answer
SPSM is State Street SPDR Portfolio S&P 600 Small Cap ETF, an ETF that tracks the S&P SmallCap 600 Index at a 0.03% expense ratio. SPSM tracks the S&P SmallCap 600 at 0.03 percent, among the lowest fees available in any equity category. Its index differs from the more familiar Russell 2000 in one structural way: S&P applies a profitability requirement before a company can be added, so the persistently loss-making end of the small-cap market is excluded by rule rather than by a manager's judgement. The portfolio is genuinely spread out, with FormFactor the largest position at 0.7 percent. Financials at 17 percent, technology at 16 percent and industrials at 16 percent share the top of the sector table.
SPSM is issued by State Street SPDR and tracks the S&P SmallCap 600 Index. It charges a 0.03% expense ratio, holds approximately $16.9B in assets under management, yields about 1.36%, and launched in 2013.
The earnings screen is the real difference
Small-cap indices sound interchangeable until you look at how companies get in. The Russell 2000 takes a slice of the market by size and asks nothing further. S&P's committee requires a record of positive earnings before admitting a company to the 600, and reviews it. The consequence is that a meaningful group of pre-revenue biotechs, cash-burning technology listings and recent speculative offerings sit in one index and not the other.
This is a design choice with real trade-offs rather than a free improvement. The screen removes companies that never become profitable, and it also removes the small number that go on to become very large from a loss-making start. Buyers of SPSM are accepting both halves of that bargain. What they are not doing is taking on an unscreened cross-section of everything small and listed in the US.
Nothing at the top to depend on
The largest holding, FormFactor, is 0.7 percent of the fund. Viasat matches it, then Molina Healthcare, Argan, BrightSpring Health Services, Element Solutions and MaxLinear at 0.6 percent, with Krystal Biotech, ESCO Technologies and Match Group at 0.5 percent. The ten largest positions together are a small fraction of assets, which is unusual enough to state plainly: no single company failing would do noticeable damage to the fund.
The corollary is that nothing single-handedly helps either. Returns come from the aggregate behaviour of hundreds of mid-sized businesses, which makes the fund a clean expression of the small-cap asset class and a poor vehicle for anyone with a view on a specific company. It also means the holdings list is unlikely to contain names a general reader recognises, which is a feature of the category rather than a flaw in the fund.
The sector shape reflects what small-cap America is
Financials lead at 17 percent, and in small-cap terms that means regional banks, insurers and specialty lenders rather than global investment banks. Technology at 16 percent skews toward component suppliers and semiconductor equipment rather than platform software. Industrials at 16 percent covers engineering, construction and niche manufacturing. Consumer discretionary is 13 percent and healthcare 12 percent, the latter split between providers and smaller drug developers.
Compared with a large-cap fund, the balance is flatter and more domestic. Small US companies generally earn a greater share of revenue at home, which makes the fund more sensitive to US credit conditions, construction activity and consumer spending than to global demand. The 1.36 percent distribution yield sits above what a mega-cap-heavy index pays, reflecting a portfolio of businesses that return more of their cash as dividends.
SPSM holdings: top 10
Approximate weights as of August 2026. Each ticker links to its individual stock guide in Walnut.
| Rank | Ticker | Company | % of SPSM | |
|---|---|---|---|---|
| 1 | FORM | FormFactor Inc | 0.7% | |
| 2 | VSAT | Viasat Inc | 0.7% | |
| 3 | MOH | Molina Healthcare Inc | 0.6% | |
| 4 | AGX | Argan Inc | 0.6% | |
| 5 | BTSG | BrightSpring Health Services Inc | 0.6% | |
| 6 | ESI | Element Solutions Inc | 0.6% | |
| 7 | MXL | MaxLinear Inc | 0.6% | |
| 8 | KRYS | Krystal Biotech Inc | 0.5% | |
| 9 | ESE | ESCO Technologies Inc | 0.5% | |
| 10 | MTCH | Match Group Inc Ordinary Shares - New | 0.5% |
How do I invest in SPSM?
There are three common ways to get SPSM exposure. Buy shares (or fractional shares) of SPSM directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic portfolio in Walnut, so SPSM sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. SPSM trades like a stock during market hours, so you buy it the same way you would any listed share.
New to buying funds? See how to buy an ETF, step by step.
Is SPSM a good buy?
Whether SPSM is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks the S&P SmallCap 600 Index, so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is SPSM a buy?
The bottom line on SPSM
SPSM gives you the S&P SmallCap 600 Index exposure in one ticker at a 0.03% expense ratio. Most investors use it as a core holding and layer more concentrated thematic portfolios on top.
More on SPSM
Whether SPSM is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is SPSM a buy?
SPSM yields 1.36% as of August 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see SPSM dividend: yield and schedule.
New to funds like SPSM? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.
Wondering how SPSM fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in SPSM with AI
Connect the broker you already use and ask Walnut's AI how SPSM fits what you actually hold: what it overlaps with, what it leaves you exposed to, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the S&P 600 and how does it differ from the Russell 2000?
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Both cover US small-caps, but they are constructed differently. The Russell 2000 selects purely by market-cap rank and rebuilds on a schedule. The S&P 600 is committee-selected and requires a company to have posted positive earnings before joining. The practical result is that unprofitable small companies appear in the Russell index and are largely absent from the S&P one.
Why is the largest holding only 0.7 percent?
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Because the index spreads across roughly six hundred companies weighted by market value, and no small-cap company is large enough relative to the rest to command a big share. That flat profile is characteristic of the asset class. It means the fund's result is driven by the average outcome across many businesses rather than by whether a handful of leaders do well.
Is 0.03 percent the full cost of owning SPSM?
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It is the management fee, not the whole cost. Buying and selling incur a bid-ask spread, and every index fund bears some internal trading cost when the benchmark reconstitutes and the fund must follow. Small-cap securities are less liquid than large-caps, so those implicit costs are typically higher here than in a mega-cap fund even when the stated fee is identical.
Which sectors dominate the fund?
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Financials at 17 percent, then technology and industrials at 16 percent each, consumer discretionary at 13 percent and healthcare at 12 percent. The distribution is much flatter than a large-cap index, where technology alone often exceeds a third. Anyone using SPSM alongside an S&P 500 fund is adding financial and industrial weight rather than more of the same technology exposure.
Does SPSM overlap with an S&P 500 fund?
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By design, no. S&P's US indices are constructed so that the 500, the MidCap 400 and the SmallCap 600 do not share constituents. A company moves between them as its size changes rather than appearing in two at once. That makes SPSM a clean complement to an S&P 500 holding, with none of the double counting you get from pairing a large-cap fund with a total-market one.
Why is the yield higher than many large-cap funds?
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The 1.36 percent distribution yield reflects a portfolio where dividend-paying banks, insurers and industrial companies carry substantial weight, and where the largest positions are not the low-yielding technology giants that dominate large-cap indices. It is still an equity yield, meaning it varies with company decisions and is not comparable to the contractual income from a bond fund.
What kind of companies sit at the top of the fund?
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The largest positions include FormFactor and MaxLinear in semiconductor test and components, Viasat in satellite communications, Molina Healthcare and BrightSpring Health Services in healthcare delivery, Argan in engineering and construction, Element Solutions in specialty chemicals and Krystal Biotech in biotechnology. It is a spread of mid-sized operating businesses rather than a themed selection.
When is SPSM the wrong tool?
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When the aim is exposure to early-stage, unprofitable growth companies, since the index screens most of them out. It is also unsuitable as a core holding on its own, because it excludes large and mid-caps entirely. And it is a poor choice for anyone who cannot tolerate the wider drawdowns small-caps have historically shown relative to large-cap indices.
What is SPSM's expense ratio?
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SPSM has an expense ratio of 0.03% per year as of August 2026, charged by State Street SPDR and deducted from the fund's value rather than billed to you separately. On a $10,000 position that is roughly $3 a year. Fees compound over time, so on a long-term holding the expense ratio is one of the few return drivers you control. It is worth comparing against other funds that track the S&P SmallCap 600 Index before you choose.
How do I compare SPSM to similar ETFs?
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Put a few fields side by side: the expense ratio (fees compound over decades), the index or strategy it tracks, the top holdings and how much they overlap with what you already own, the dividend yield, and the AUM, liquidity, and bid-ask spread that affect trading costs. For index funds, tracking error (how closely it follows its index) and tax efficiency matter too. SPSM's figures are above; the full method is in Walnut's guide on how to compare ETFs.
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Walnut is informational, not investment advice. Holdings weights and fund statistics on this page are approximations stamped to August 2026; verify current figures against State Street SPDR's fund page or your broker before investing.