OppenheimerFunds unveils suite of single- and multi-factor ETFs

Nov 14th, 2017 | By | Category: Equities

OppenheimerFunds has expanded its Beta Solutions product offering with the launch of a suite of eight new ETFs, including two multi-factor and six single-factor products, in partnership with global index provider FTSE Russell. The funds have been listed on Cboe ETF Marketplace.

Sharon French, head of beta solutions at OppenheimerFunds

Each ETF harnesses the expertise of OppenheimerFunds’ Global Multi-Asset research team to deliver its intended strategy. One of the multi-factor ETFs as well as all the single-factor ETFs target the US large-cap equities universe – represented by the Russell 1000 Index – while the second multi-factor ETF targets US small-caps – its starting universe is the Russell 2000 Index.

The two dynamic multi-factor ETFs capture the diversification benefits of multiple factors while also cyclically adjusting factor exposure based on different macroeconomic environments. In contrast, the single-factor ETFs offer precision exposure to well-established and time-tested investment styles including value, momentum, quality, size, yield and low volatility.

Sharon French, head of beta solutions at OppenheimerFunds, commented: “Our continued focus on building an innovative, market-leading ETF platform with a diversified product set of investment solutions across a variety of markets, geographies and factors remains driven by the needs of our clients. With the addition of our new factor-based products, led by our dynamic multi-factor ETFs, we are giving clients the next generation tools they need to help produce compelling investment results in any market environment.”

Multi-factor ETFs

The Oppenheimer Russell 1000 Dynamic Multifactor ETF (OMFL US) provides access to a selection of companies in the Russell 1000 through exposure to a subset of the low volatility, momentum, quality, size and value factors. The fund has a total expense ratio (TER) of 0.29%.

The Oppenheimer Russell 2000 Dynamic Multifactor ETF (OMFS) applies the same methodology as OMFL to the Russell 2000 and has a TER of 0.39%.

While most traditional multi-factor ETFs provide static factor exposures, usually equal-weighting them within the portfolio, the OppenheimerFunds approach is one of the first to propose dynamic factor exposures that respond to market conditions.

Specifically, each ETF will track a different index depending on whether the macroeconomic environment is deemed to be in recovery, expansion, slowdown, or contraction. Each index tilts to certain factors which have historically outperformed during this phase: recovery – tilt to size and value; expansion – size, value and momentum; slowdown – volatility and quality; and contraction – volatility, momentum, and quality. The analysis of current macroeconomic conditions is performed on a monthly basis.

Single-Factor ETFs

The new OppenheimerFunds’ single-factor ETFs are outlined below. Each has a TER of 0.19%.

Oppenheimer Russell 1000 Momentum Factor ETF (OMOM US)
Oppenheimer Russell 1000 Value Factor ETF (OVLU US)
Oppenheimer Russell 1000 Low Volatility Factor ETF (OVOL US)
Oppenheimer Russell 1000 Size Factor ETF (OSIZ US)
Oppenheimer Russell 1000 Quality Factor ETF (OQAL US)
Oppenheimer Russell 1000 Yield Factor ETF (OYLD US)  

“Our new single- and multi-factor ETFs are an exciting and significant addition to our rapidly expanding suite of smart beta products,” said Art Steinmetz, chairman and CEO, OppenheimerFunds. “We believe the combination of regime-based insights and FTSE Russell’s proven methodology is a unique differentiator that will provide our clients with a broad array of options to meet their investment needs.”

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