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Is SPDR Russell 1000 Low Volatility Focus ETF (ONEV) a Strong ETF Right Now?
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Making its debut on 12/02/2015, smart beta exchange traded fund SPDR Russell 1000 Low Volatility Focus ETF (ONEV - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend 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.
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.
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 sponsored by State Street Global Advisors. It has amassed assets over $577.60 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, ONEV seeks to match the performance of the Russell 1000 Low Volatility Focused Factor Index.
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
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 ONEV, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.82%.
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.
This ETF has heaviest allocation in the Industrials sector - about 19.10% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Willis Towers Watson Public Limited Company (WTW - Free Report) accounts for about 1.31% of total assets, followed by Mckesson Corporation (MCK - Free Report) and Archer-Daniels-Midland Company (ADM - Free Report) .
The top 10 holdings account for about 7.85% of total assets under management.
Performance and Risk
Year-to-date, the SPDR Russell 1000 Low Volatility Focus ETF has gained about 1.67% so far, and is down about -3.49% over the last 12 months (as of 04/10/2023). ONEV has traded between $91.93 and $111.73 in this past 52-week period.
The fund has a beta of 0.96 and standard deviation of 19.34% for the trailing three-year period. With about 475 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 $305.36 billion in assets, SPDR S&P 500 ETF has $370.84 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?
Making its debut on 12/02/2015, smart beta exchange traded fund SPDR Russell 1000 Low Volatility Focus ETF (ONEV - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend 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.
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.
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 sponsored by State Street Global Advisors. It has amassed assets over $577.60 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. Before fees and expenses, ONEV seeks to match the performance of the Russell 1000 Low Volatility Focused Factor Index.
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
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 ONEV, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.82%.
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.
This ETF has heaviest allocation in the Industrials sector - about 19.10% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Willis Towers Watson Public Limited Company (WTW - Free Report) accounts for about 1.31% of total assets, followed by Mckesson Corporation (MCK - Free Report) and Archer-Daniels-Midland Company (ADM - Free Report) .
The top 10 holdings account for about 7.85% of total assets under management.
Performance and Risk
Year-to-date, the SPDR Russell 1000 Low Volatility Focus ETF has gained about 1.67% so far, and is down about -3.49% over the last 12 months (as of 04/10/2023). ONEV has traded between $91.93 and $111.73 in this past 52-week period.
The fund has a beta of 0.96 and standard deviation of 19.34% for the trailing three-year period. With about 475 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 $305.36 billion in assets, SPDR S&P 500 ETF has $370.84 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.