Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the SPDR Russell 1000 Momentum Focus ETF (
ONEO Quick Quote ONEO - Free Report) is a smart beta exchange traded fund launched on 12/02/2015. What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by State Street Global Advisors, ONEO has amassed assets over $293.34 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. ONEO, before fees and expenses, seeks to match the performance of the Russell 1000 Momentum Focused Factor Index.
The Russell 1000 Momentum Focused Factor Index reflects the performance of a segment of large-capitalization U.S. equity securities demonstrating a combination of core factors with a focus factor comprising high momentum characteristics.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.20%, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.31%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
ONEO's heaviest allocation is in the Information Technology sector, which is about 19.70% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Hp Inc. (
HPQ Quick Quote HPQ - Free Report) accounts for about 1.12% of total assets, followed by Kroger Co. ( KR Quick Quote KR - Free Report) and Best Buy Co. Inc. ( BBY Quick Quote BBY - Free Report) .
ONEO's top 10 holdings account for about 5.52% of its total assets under management.
Performance and Risk
The ETF has lost about -10.85% and is down about -3% so far this year and in the past one year (as of 05/18/2022), respectively. ONEO has traded between $89.43 and $107.45 during this last 52-week period.
The fund has a beta of 1.08 and standard deviation of 24.77% for the trailing three-year period. With about 888 holdings, it effectively diversifies company-specific risk.
SPDR Russell 1000 Momentum 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 Quick Quote IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF ( SPY Quick Quote SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $290.22 billion in assets, SPDR S&P 500 ETF has $367.79 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.
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.