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Is SPDR Russell 1000 Yield Focus ETF (ONEY) a Strong ETF Right Now?
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A smart beta exchange traded fund, the SPDR Russell 1000 Yield Focus ETF (ONEY - Free Report) debuted on 12/02/2015, and offers broad exposure to the Style Box - Large Cap Value 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $719.56 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. ONEY, before fees and expenses, seeks to match the performance of the Russell 1000 Yield Focused Factor Index.
The Russell 1000 Yield 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 high yield characteristics.
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 0.20%, making it one of the cheaper products in the space.
ONEY's 12-month trailing dividend yield is 3.37%.
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.
Representing 17.80% of the portfolio, the fund has heaviest allocation to the Financials sector; Energy and Materials round out the top three.
When you look at individual holdings, Pioneer Natural Resources Co (PXD - Free Report) accounts for about 1.91% of the fund's total assets, followed by Devon Energy Corp (DVN - Free Report) and Diamondback Energy Inc (FANG - Free Report) .
ONEY's top 10 holdings account for about 14.02% of its total assets under management.
Performance and Risk
Year-to-date, the SPDR Russell 1000 Yield Focus ETF has gained about 1.13% so far, and is down about -0.86% over the last 12 months (as of 11/22/2023). ONEY has traded between $86.22 and $102.43 in this past 52-week period.
The fund has a beta of 1.13 and standard deviation of 18.15% for the trailing three-year period. With about 302 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Russell 1000 Yield Focus ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $50.16 billion in assets, Vanguard Value ETF has $99.61 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 Value.
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 Yield Focus ETF (ONEY) a Strong ETF Right Now?
A smart beta exchange traded fund, the SPDR Russell 1000 Yield Focus ETF (ONEY - Free Report) debuted on 12/02/2015, and offers broad exposure to the Style Box - Large Cap Value 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $719.56 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. ONEY, before fees and expenses, seeks to match the performance of the Russell 1000 Yield Focused Factor Index.
The Russell 1000 Yield 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 high yield characteristics.
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 0.20%, making it one of the cheaper products in the space.
ONEY's 12-month trailing dividend yield is 3.37%.
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.
Representing 17.80% of the portfolio, the fund has heaviest allocation to the Financials sector; Energy and Materials round out the top three.
When you look at individual holdings, Pioneer Natural Resources Co (PXD - Free Report) accounts for about 1.91% of the fund's total assets, followed by Devon Energy Corp (DVN - Free Report) and Diamondback Energy Inc (FANG - Free Report) .
ONEY's top 10 holdings account for about 14.02% of its total assets under management.
Performance and Risk
Year-to-date, the SPDR Russell 1000 Yield Focus ETF has gained about 1.13% so far, and is down about -0.86% over the last 12 months (as of 11/22/2023). ONEY has traded between $86.22 and $102.43 in this past 52-week period.
The fund has a beta of 1.13 and standard deviation of 18.15% for the trailing three-year period. With about 302 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Russell 1000 Yield Focus ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $50.16 billion in assets, Vanguard Value ETF has $99.61 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 Value.
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.