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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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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 $862.66 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the Russell 1000 Yield Focused Factor Index before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.20% for ONEY, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.40%.
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.
ONEY's heaviest allocation is in the Consumer Staples sector, which is about 13.90% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Bristol Myers Squibb Co (BMY - Free Report) accounts for about 2.59% of total assets, followed by Altria Group Inc (MO - Free Report) and Gilead Sciences Inc (GILD - Free Report) .
Its top 10 holdings account for approximately 13.65% of ONEY's total assets under management.
Performance and Risk
So far this year, ONEY has gained about 10.34%, and is up roughly 12.20% in the last one year (as of 12/19/2024). During this past 52-week period, the fund has traded between $97.18 and $117.55.
ONEY has a beta of 1.11 and standard deviation of 16.63% for the trailing three-year period. With about 294 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $63.54 billion in assets, Vanguard Value ETF has $126.41 billion. SCHD has an expense ratio of 0.06% 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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 $862.66 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the Russell 1000 Yield Focused Factor Index before fees and expenses.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.20% for ONEY, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.40%.
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.
ONEY's heaviest allocation is in the Consumer Staples sector, which is about 13.90% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Bristol Myers Squibb Co (BMY - Free Report) accounts for about 2.59% of total assets, followed by Altria Group Inc (MO - Free Report) and Gilead Sciences Inc (GILD - Free Report) .
Its top 10 holdings account for approximately 13.65% of ONEY's total assets under management.
Performance and Risk
So far this year, ONEY has gained about 10.34%, and is up roughly 12.20% in the last one year (as of 12/19/2024). During this past 52-week period, the fund has traded between $97.18 and $117.55.
ONEY has a beta of 1.11 and standard deviation of 16.63% for the trailing three-year period. With about 294 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $63.54 billion in assets, Vanguard Value ETF has $126.41 billion. SCHD has an expense ratio of 0.06% 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.