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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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
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 $616.23 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. ONEV is managed by State Street Global Advisors. ONEV, before fees and expenses, 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
ONEV's 12-month trailing dividend yield is 1.76%.
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.
This ETF has heaviest allocation in the Industrials sector - about 21.40% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Cencora Inc (COR - Free Report) accounts for about 1.28% of total assets, followed by Centene Corp (CNC - Free Report) and Cognizant Tech Solutions A (CTSH - Free Report) .
ONEV's top 10 holdings account for about 9.92% of its total assets under management.
Performance and Risk
Year-to-date, the SPDR Russell 1000 Low Volatility Focus ETF has gained about 1.81% so far, and is up about 10.49% over the last 12 months (as of 02/22/2024). ONEV has traded between $99.61 and $116.84 in this past 52-week period.
The ETF has a beta of 0.97 and standard deviation of 15.62% for the trailing three-year period. With about 472 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 $432.26 billion in assets, SPDR S&P 500 ETF has $488.15 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
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 $616.23 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. ONEV is managed by State Street Global Advisors. ONEV, before fees and expenses, 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
ONEV's 12-month trailing dividend yield is 1.76%.
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.
This ETF has heaviest allocation in the Industrials sector - about 21.40% of the portfolio. Consumer Discretionary and Healthcare round out the top three.
Looking at individual holdings, Cencora Inc (COR - Free Report) accounts for about 1.28% of total assets, followed by Centene Corp (CNC - Free Report) and Cognizant Tech Solutions A (CTSH - Free Report) .
ONEV's top 10 holdings account for about 9.92% of its total assets under management.
Performance and Risk
Year-to-date, the SPDR Russell 1000 Low Volatility Focus ETF has gained about 1.81% so far, and is up about 10.49% over the last 12 months (as of 02/22/2024). ONEV has traded between $99.61 and $116.84 in this past 52-week period.
The ETF has a beta of 0.97 and standard deviation of 15.62% for the trailing three-year period. With about 472 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 $432.26 billion in assets, SPDR S&P 500 ETF has $488.15 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.