SSGA broadens SPDR line-up with three smart beta ETFs

Dec 8th, 2015 | By | Category: Equities

State Street Global Advisors (SSGA), the asset manager behind the SPDR brand of exchange-traded funds, has launched three smart beta ETFs based on FTSE Russell indices. The ETFs offer core US equity exposure to investors looking for an opportunity to improve risk-adjusted returns.

SSGA adds three smart beta ETFs to SPDR line-up

State Street’s latest smart beta ETFs deliver yield, low volatility or momentum alongside broad US equity exposure.

These latest SPDR ETFs are designed for investors who want to tailor their specific risk and return objectives while maintaining a core position within US equities. The objectives include looking for yield, reducing volatility or capital growth.

“The adoption of smart beta strategies has been one of the most powerful trends in investing over the recent years and investors are now rethinking their core exposures to leverage approaches that seek to bridge the gap between active and passive,” said James Ross, executive vice president and global head of SPDR Exchange Traded Funds at State Street Global Advisors.

The SPDR Russell 1000 Yield Focus ETF (ONEY), the SPDR Russell 1000 Momentum Focus ETF (ONEO) and the SPDR Russell 1000 Low Volatility Focus ETF (ONEV) offer exposure to the yield, momentum and low volatility smart beta factors respectively. These factors have been observed to produce superior risk-adjusted returns when compared to market-capitalisation weighted benchmarks but also tend to perform differently through the market cycle.

Ross added: “In providing a new approach to factor investing that can help capture prevailing investor objectives, ONEY, ONEO and ONEV represent an exciting new chapter in the evolution of smart beta ETFs.”

The ETFs aim to track the performance of the newly released FTSE Russell Focused Factor Indices which use a rules-based methodology to tilt portfolio holdings and weightings towards companies with either yield, low volatility or momentum characteristics. In addition, each index benefits from factor diversification through additional tilts toward quality, value and size factors.

Ron Bundy, CEO North America Benchmarks, FTSE Russell, said: “We are pleased to align with State Street Global Advisors to offer indices as the basis for new ETFs. Our new Focused Factor Indices draw on the extensive expertise of our FTSE Russell global index team and combine multiple factors to help investors meet their objectives.”

These three new smart beta ETFs were developed with the Alaska Permanent Fund Corporation (APFC) as a cornerstone investor in the funds. The funds have been listed on the NYSE Arca and carry a gross expense ratio of 0.20%.

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