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Is SPDR MSCI EAFE StrategicFactors ETF (QEFA) a Strong ETF Right Now?
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The SPDR MSCI EAFE StrategicFactors ETF (QEFA - Free Report) was launched on 06/04/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $931.30 million, this makes it one of the average sized ETFs in the Broad Developed World ETFs. QEFA is managed by State Street Global Advisors. Before fees and expenses, this particular fund seeks to match the performance of the MSCI EAFE Factor Mix A-Series Index.
The MSCI EAFE Factor Mix A-Series Index captures large and mid-cap representation across 22 developed market Europe, Australasia, and Far East countries and aims to represent the performance of value, low volatility, and quality factor strategies.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.30%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.90%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Nestle S.a. (NESN-CH) accounts for about 2.62% of the fund's total assets, followed by Novo Nordisk A/s Class B (NOVO.B-DK) and Roche Holding Ltd Dividend Right Cert. (ROG-CH).
The top 10 holdings account for about 17.49% of total assets under management.
Performance and Risk
The ETF has gained about 4.15% and is down about -3.49% so far this year and in the past one year (as of 02/27/2023), respectively. QEFA has traded between $55.35 and $73.40 during this last 52-week period.
QEFA has a beta of 0.77 and standard deviation of 22.14% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 716 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI EAFE StrategicFactors ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI EAFE ETF (EFA - Free Report) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA - Free Report) tracks MSCI EAFE Investable Market Index. IShares MSCI EAFE ETF has $47.02 billion in assets, iShares Core MSCI EAFE ETF has $93.22 billion. EFA has an expense ratio of 0.33% and IEFA charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 MSCI EAFE StrategicFactors ETF (QEFA) a Strong ETF Right Now?
The SPDR MSCI EAFE StrategicFactors ETF (QEFA - Free Report) was launched on 06/04/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $931.30 million, this makes it one of the average sized ETFs in the Broad Developed World ETFs. QEFA is managed by State Street Global Advisors. Before fees and expenses, this particular fund seeks to match the performance of the MSCI EAFE Factor Mix A-Series Index.
The MSCI EAFE Factor Mix A-Series Index captures large and mid-cap representation across 22 developed market Europe, Australasia, and Far East countries and aims to represent the performance of value, low volatility, and quality factor strategies.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.30%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.90%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Nestle S.a. (NESN-CH) accounts for about 2.62% of the fund's total assets, followed by Novo Nordisk A/s Class B (NOVO.B-DK) and Roche Holding Ltd Dividend Right Cert. (ROG-CH).
The top 10 holdings account for about 17.49% of total assets under management.
Performance and Risk
The ETF has gained about 4.15% and is down about -3.49% so far this year and in the past one year (as of 02/27/2023), respectively. QEFA has traded between $55.35 and $73.40 during this last 52-week period.
QEFA has a beta of 0.77 and standard deviation of 22.14% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 716 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI EAFE StrategicFactors ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI EAFE ETF (EFA - Free Report) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA - Free Report) tracks MSCI EAFE Investable Market Index. IShares MSCI EAFE ETF has $47.02 billion in assets, iShares Core MSCI EAFE ETF has $93.22 billion. EFA has an expense ratio of 0.33% and IEFA charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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.