SPDR Portfolio S&P 1500 Composite Stock Market ETF

SPTM

Market cap $11.4B

SPDR Portfolio S&P 1500 Composite Stock Market ETF now offers more attractive broad-market exposure as macro risks have diminished. SPTM's heavy tech weighting, especially in NVDA, MSFT, and AAPL, positions the fund to benefit from ongoing AI-driven market optimism. Recent FOMC rate cut and supportive labor/inflation data have improved sentiment, likely widening SPTM's future outperformance over value stocks.

SPTM provides diversified U.S. equity exposure with a low 0.03% expense ratio, tracking the S&P Composite 1500 Index. In this article, I focus on the short- and medium-term market outlook. Current macroeconomic data support cautious optimism as risks include trade tensions and central bank caution.

When most investors think about buying "the market," they probably have the S&P 500 index (^GSPC 0.74%) in mind. But that's not the market -- it's just 500 or so hand-selected large and economically representative companies.

Warren Buffett's best advice for the average investor is to just buy "the market." He has singled out the S&P 500 index as a good choice for this approach, and an S&P 500 ETF wouldn't be a bad choice, but it also isn't "the market.

The Conference Board's measure of CEO confidence rose by nine points in the first quarter of 2025, reaching a reading of 60 -- the highest level since 2022.

Wall Street is full of some of the sharpest investors in the world. Professional fund managers tend to be highly educated, hard-working, and extremely smart.

SPTM offers broad US market exposure by targeting all major market size segments. The bullish case for funds like this is solid considering future interest-rate cuts, but investors should assess the current risks before they start investing or adding to this ETF. In this article, I go into all of that and present a few alternatives for those who want to be more defensive or consider another long-term vehicle as their core.

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.

Per the legendary investor John Hussman -- famous for predicting the 2000 and 2008 crashes, the latest stock rally is ingrained in the extreme fear of missing out. This FOMO rally may fizzle if the consensus view starts changing and valuation gets too ripe.

The Red Sea crisis, caused by attacks on commercial shipping vessels by Houthi militants, has impacted global trade and shipping routes. Shipping costs and transit times have increased, particularly on routes between Asia and Europe. We expect the crisis to have a limited impact on the US market due to its trade routes being less impacted.