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Is SPDR Russell 1000 Low Volatility Focus ETF (ONEV) a Strong ETF Right Now?
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A smart beta exchange traded fund, the SPDR Russell 1000 Low Volatility Focus ETF (ONEV - Free Report) debuted on 12/02/2015, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors, and has been able to amass over $681.27 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. ONEV seeks to match the performance of the Russell 1000 Low Volatility Focused Factor Index before fees and expenses.
The Russell 1000 Low Volatility Focused Factor Index reflects the performance of a segment of large-capitalization U.S. equity securities demonstrating a combination of core factors high value, high quality, and low size characteristics, with a focus factor comprising low volatility characteristics.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.66%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
ONEV's heaviest allocation is in the Industrials sector, which is about 18.80% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Cognizant Tech Solutions A (CTSH - Free Report) accounts for about 1.45% of the fund's total assets, followed by Bristol Myers Squibb Co (BMY - Free Report) and Humana Inc (HUM - Free Report) .
The top 10 holdings account for about 9.5% of total assets under management.
Performance and Risk
The ETF has added about 12.12% and is up roughly 20.37% so far this year and in the past one year (as of 08/28/2024), respectively. ONEV has traded between $99.61 and $127.46 during this last 52-week period.
ONEV has a beta of 0.97 and standard deviation of 15.41% for the trailing three-year period. With about 434 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Russell 1000 Low Volatility Focus ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $518.92 billion in assets, SPDR S&P 500 ETF has $567.76 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SPDR Russell 1000 Low Volatility Focus ETF (ONEV) a Strong ETF Right Now?
A smart beta exchange traded fund, the SPDR Russell 1000 Low Volatility Focus ETF (ONEV - Free Report) debuted on 12/02/2015, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors, and has been able to amass over $681.27 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. ONEV seeks to match the performance of the Russell 1000 Low Volatility Focused Factor Index before fees and expenses.
The Russell 1000 Low Volatility Focused Factor Index reflects the performance of a segment of large-capitalization U.S. equity securities demonstrating a combination of core factors high value, high quality, and low size characteristics, with a focus factor comprising low volatility characteristics.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.66%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
ONEV's heaviest allocation is in the Industrials sector, which is about 18.80% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Cognizant Tech Solutions A (CTSH - Free Report) accounts for about 1.45% of the fund's total assets, followed by Bristol Myers Squibb Co (BMY - Free Report) and Humana Inc (HUM - Free Report) .
The top 10 holdings account for about 9.5% of total assets under management.
Performance and Risk
The ETF has added about 12.12% and is up roughly 20.37% so far this year and in the past one year (as of 08/28/2024), respectively. ONEV has traded between $99.61 and $127.46 during this last 52-week period.
ONEV has a beta of 0.97 and standard deviation of 15.41% for the trailing three-year period. With about 434 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Russell 1000 Low Volatility Focus ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $518.92 billion in assets, SPDR S&P 500 ETF has $567.76 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.