SSGA launches four value-weighted smart beta ETFs

Feb 19th, 2015 | By | Category: Equities

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State Street Global Advisors (SSGA), the asset manager behind the SPDR brand of exchange-traded funds, has announced the launch of four smart beta ETFs linked to the MSCI Value Weighted Index family.

SSGA launches four MSCI Value Weighted smart beta ETFs

SSGA has unveiled a suite of four smart beta ETFs linked to the MSCI Value Weighted Index series.

The four funds, all of which have been listed on the Deutsche Börse, aim to capture the value premium across European and US broad-market and small-cap equity market segments.

They are the SPDR MSCI Europe Value Weighted UCITS ETF (ZPRW), the SPDR MSCI USA Value Weighted UCITS ETF (ZPRU), the SPDR MSCI Europe Small Cap Value Weighted UCITS ETF (ZPRX) and the SPDR MSCI USA Small Cap Value Weighted UCITS ETF (ZPRV).

The four ETFs follow a methodology that reweights all stocks from the relevant parent MSCI World sub-index based on four financial metrics – sales, book value, earnings and cash earnings. Using these measures, the indices are tilted towards those stocks with the cheapest valuations, with the aim of providing superior risk-adjusted performance while maintaining the strong investability and capacity features of their parent cap-weighted indices.

Alexis Marinof, head of SPDR ETFs, EMEA, at SSGA, commented: “The growth of advanced beta [widely referred to as smart beta] has been huge over the past decade with global assets increasing fivefold since 2008. Investors are looking for new ways to access sources of return while managing equity market risk. Advanced beta strategies, which seek to isolate factors that have been shown to outperform standard market cap-weighted indices over time, respond directly to this demand. These new funds allow investors to gain exposure to the value premium across large, mid or small-cap exposures in both the US and Europe, while benefiting from the liquidity, transparency and flexibility of ETFs.”

Deborah Yang, managing director, MSCI Index Business Unit, EMEA and South Asia, added: “MSCI is delighted that SSGA chose to license the MSCI Value Weighted Indices for its range of SSGA advanced beta equity ETFs. MSCI’s factor indices are designed to provide consistent and accurate benchmarks in this rapidly expanding index sector.”

The new ETFs add to SSGA’s existing advanced beta equity range which includes five mutual funds and 13 ETFs.

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