Embracing Volatility With SPTM S&P 1500 ETF

🌟🌟🌟DeepSeek caused a Deep Sink in the US markets on Monday, sparking a panic sell off especially Semiconductor Stocks with Nvidia losing almost USD 600 billion  in its market capitalisation in a single day.

However $SPDR Portfolio S&P 1500 Composite Stock Market ETF(SPTM)$ SPTM which covers the entire spectrum of the US market only dropped 1.3% and in the past 5 days  0.2%.  In fact SPTM recently reached its all time high of USD 74.45.

SPTM seeks to provide investment results that tracks the performance of S&P Composite 1500 index.  This Index consists of stocks included in the S&P500 Index, S&P 400 Index and S&P Small Cap Index.  That includes approximately 90% of the investible US equity market.

The Top 10 holdings include Nvidia, Apple, Microsoft, Amazon, Meta Platforms, Alphabet Class A and Class C, Broadcom, Tesla and Berkshire Hathaway.

The Top 10 holdings weightage is 33% with Nvidia at 6.4%, Apple at 6% and Microsoft at 5.8%.

The expense ratio is a low 0.03% which is one of the lowest among competing ETFs.  Dividends are paid every 3 months.  SPTM goes ex dividend on March 24 2025.  The current dividend yield is 1.23%.

Nvidia $NVIDIA(NVDA)$  recently overtook Apple $Apple(AAPL)$  as the most valuable company in the world with a market capitalisation of over USD 3 Trillion.   News of DeepSeek's latest AI Model R1 hit Nvidia really hard as its share price dropped by 16.8% on Monday. 

DeepSeek announced a significant breakthrough late last week with AI models that perform nearly on par with advanced US born technology.  The sticking point is that DeepSeek claims to have trained one of its latest models for USD 5.6 million in computing costs.  This is just a fraction of what is currently spent in the US for the same activity. 

Fortunately with SPTM, Nvidia only takes up 6.4% weightage of the ETF, so the impact is not so severe.   That is the beauty of investing in SPTM.  It has the power of many and even though the markets maybe down, it is less impacted by the negative news. 

I have invested in SPTM since 2022 and in that time its progress has been slow and steady, if a little boring.  But when the chips are down like today, SPTM shines through to chart a path through stormy waters.  

On looking back on SPTM performance 5 years ago, it is up 83% and since its inception in October 4 2000, SPTM has risen 249%.  

Wall Street Analysts are bullish on SPTM with a Buy rating, Target price of USD 81.68.  This is an upside potential of 11% according to Tipranks. 

Embracing Volatility is part and parcel of investing in the markets.  However with patience and time in the market, the markets have always recovered, rewarding those who remain calm and focused on the long term horizon.  

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