MidCap Spiders were launched in 1995 as one of the first of a now fast-growing investment category called exchange traded funds (ETFs). Each MidCap Spider share represents all 400 middle-market stocks of the S&P MidCap 400. And unlike traditional index funds, you can buy and sell MidCap Spiders all day long, just like stocks. So with one investment you get instant diversification combined with trading flexibility. The best of both worlds, made even better by low management fees and tax efficiency (ordinary brokerage commission applies). MidCap Spiders give investors a whole new way to diversify. Find out why they may make sense for your portfolio.
The S&P MidCap 400 is the most widely used index for mid-sized companies, representing a total of 400 middle-market stocks. These companies have matured to achieve a market cap range of $1-4 billion. While mid-cap stocks are subject to greater risk than large-caps, they are less volatile than companies in the often uncertain start-up phase.
In just one transaction, MidCap Spiders offer you the convenience of investing in a portfolio of 400 mid-cap stocks. The diversification they provide means that the ups and downs of one specific company, or even a particular industry, are lessened for MidCap Spider holders.
Find out How to Invest.
MidCap Spiders are designed to generally correspond to the price and yield performance of the S&P MidCap 400, before expenses, so you're not paying high management and sponsor fees. Indeed, expenses are among the lowest for investments of this type. Of course, you'll have to pay your normal brokerage commissions when you buy or sell.
Get more information on fees and expenses in Frequently Asked Questions.
MidCap Spiders offer potential tax efficiency in two ways:
1. They have lower portfolio turnover compared with actively managed portfolios because securities held by MidCap Spiders typically are sold only to reflect changes in the composition of the S&P MidCap 400. This helps to minimize capital gains distributions.
2. Exchange trading further enhances MidCap Spiders' tax efficiency. You are sheltered from other shareholder activity because the Trust doesn't have to sell underlying stocks to meet redemptions that can prompt capital gains distributions. If you want to liquidate shares in MidCap Spiders, you simply sell them, just like you would a stock, to other investors through exchange trading.
Get more information on tax-efficiency in Frequently Asked Questions.
You can buy or sell shares of MidCap Spiders all through the trading day, not just once-a-day when the market closes. So that means you can access current share prices from your broker or financial advisor, or from our Quick Quote. Of course, if you're investing for the long term, your MidCap Spiders can be held throughout the life of the MidCap SPDR Trust, into the 22nd century.
Find out How to Invest.
Any net dividends are paid quarterly. And you may be able to automatically reinvest them if your broker provides this particular service.
You can buy MidCap Spiders on margin, subject to the same requirements that apply to common stocks. One thing to remember is that you may need to deposit more money or securities into your margin account if the equity (including the amount attributable to your ETF shares) in your account declines. This requirement is the same for all stocks, not just ETFs. As well, there are some additional risks associated with margin trading. You should contact your broker regarding initial and maintenance margin requirements.
You can sell MidCap Spiders short on any movement in the security's price, including a downward movement, at any time during the trading day. You will need to arrange to borrow securities before selling short. And you should contact your broker about initial and maintenance margin requirements.