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Is SPDR Russell 1000 Momentum Focus ETF (ONEO) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the SPDR Russell 1000 Momentum Focus ETF (ONEO - Free Report) is a smart beta exchange traded fund launched on 12/02/2015.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors, and has been able to amass over $219.96 million, which makes 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.
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's 12-month trailing dividend yield comes in at 1.88%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
ONEO's heaviest allocation is in the Information Technology sector, which is about 16.40% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Hp Inc. (HPQ - Free Report) accounts for about 1.16% of total assets, followed by Nucor Corporation (NUE - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .
Its top 10 holdings account for approximately 7.02% of ONEO's total assets under management.
Performance and Risk
The ETF has lost about -0.22% so far this year and is down about -8.09% in the last one year (as of 03/29/2023). In the past 52-week period, it has traded between $82.11 and $101.69.
ONEO has a beta of 1.08 and standard deviation of 21.62% for the trailing three-year period. With about 886 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - 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 $296.39 billion in assets, SPDR S&P 500 ETF has $360.27 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 Momentum Focus ETF (ONEO) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the SPDR Russell 1000 Momentum Focus ETF (ONEO - Free Report) is a smart beta exchange traded fund launched on 12/02/2015.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors, and has been able to amass over $219.96 million, which makes 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.
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's 12-month trailing dividend yield comes in at 1.88%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
ONEO's heaviest allocation is in the Information Technology sector, which is about 16.40% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Hp Inc. (HPQ - Free Report) accounts for about 1.16% of total assets, followed by Nucor Corporation (NUE - Free Report) and Steel Dynamics Inc. (STLD - Free Report) .
Its top 10 holdings account for approximately 7.02% of ONEO's total assets under management.
Performance and Risk
The ETF has lost about -0.22% so far this year and is down about -8.09% in the last one year (as of 03/29/2023). In the past 52-week period, it has traded between $82.11 and $101.69.
ONEO has a beta of 1.08 and standard deviation of 21.62% for the trailing three-year period. With about 886 holdings, it effectively diversifies company-specific risk.
Alternatives
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 - 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 $296.39 billion in assets, SPDR S&P 500 ETF has $360.27 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.