GameStop may be the top holding in SPDR S&P 600 Small Cap Value, but that’s not the only reason the ETF is beating its growth-stock counterpart.
The $4.2 billion value fund tracks the S&P SmallCap 600 Value Index (SLYV), composed of stocks with the strongest value traits based on book value to price ratio, earnings to price ratio, and sales to price ratio. SLYV rallied 32% this year through Thursday’s close.
That more than doubles the return of its growth stock counterpart, SPDR S&P 600 Small Cap Growth (SLYG), which is up 15%. The index SLYG tracks includes stocks with the strongest growth traits based on sales growth, earnings change to price and momentum.
Back to SLYV, financials accounted for the biggest sector weight at 24% of assets. Industrials weighed in at about 17%, consumer discretionary 15% and real estate 10%. Information technology was next at 8% and materials, energy and health care, 6% each. Smaller positions in consumer staples, utilities and communication services made up the rest.
SPDR S&P 600 Small Cap Value is in IBD’s ETF Leaders, but SPDR S&P 600 Small Cap Growth is not.
GameStop Stock Leads
GameStop (GME), Macy’s (M), PDC Energy (PDCE), Resideo Technologies (REZI) and BankUnited (BKU) were the top five holdings as of Wednesday.
Pacific Premier Bancorp (PPBI), Bed Bath & Beyond (BBBY), Ameris Bancorp (ABCB), First Hawaiian (FHB) and Insight Enterprises (NSIT) rounded out the top 10.
GameStop has undergone wide swings this year. It rocketed about 2,500% early this year amid the short-squeeze rally fueled by the Reddit/WallStreetBets crowd. GME stock then crashed 92% from a Jan. 28 high to its mid-February low. That was followed by an 805% surge the next three weeks, and a 66% drop over the next two weeks.
Action had been relatively subdued since, until Thursday’s 27% dive. Even after that, GameStop stock was up 1,070% year to date through Thursday’s close.
Could GME be inflating SLYV’s performance? Certainly, given its quadruple-digit gain. But a look at SLYG’s portfolio is interesting. GameStop stock is also the top holding in the growth stock ETF, though the rest of the top 10 differ vastly.
Second Meme Stock In Top 10
PDC Energy, up 130%, saw the next biggest gain in the top 10. The Colorado-based oil and gas explorer has a 97 Relative Strength Rating, which mean it’s in the top 3% of all stocks. Its relative strength line is at a 52-week high, a bullish sign.
Bed Bath & Beyond, another meme stock, is up 78% this year. Shares surged more than 200% in January, amid a spate of wild double-digit swings. BBBY stock then gave back the bulk of its gains.
But the home goods retailer appears to be back on the radar of the WallStreetBets discussion group. On June 2, Bed Bath & Beyond soared 62% before diving 28% the next session.
The rest of the top 10 stocks have also outperformed the broader market. Macy’s is up 68% year to date, while Resideo, Pacific Premier and Ameris have risen more than 40% each. The lowest gainer, bank holding company First Hawaiian, has advanced 20%. The S&P 500 held a 13% gain through Thursday’s close.
SLYV remains in potential buy range from an 87.29 entry of a cup with handle, according to MarketSmith chart analysis. SLYV and SLYG charge a 0.15% expense ratio.
Follow Nancy Gondo on Twitter at @IBD_NGondo
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