Is SPDR Russell 1000 Low Volatility Focus ETF (ONEV) a Strong ETF Right Now?

The SPDR Russell 1000 Low Volatility Focus ETF (ONEV) was launched on 12/02/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Managed by State Street Global Advisors, ONEV has amassed assets over $560.49 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund, 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.

It has a 12-month trailing dividend yield of 1.81%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

Representing 18.30% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Information Technology round out the top three.

When you look at individual holdings, Hp Inc. (HPQ) accounts for about 1.12% of the fund's total assets, followed by Willis Towers Watson Public Limited Company (WTW) and Archer-Daniels-Midland Company (ADM).

ONEV's top 10 holdings account for about 7.68% of its total assets under management.

Performance and Risk

So far this year, ONEV has lost about -13.45%, and is down about -5.28% in the last one year (as of 10/06/2022). During this past 52-week period, the fund has traded between $91.93 and $114.25.

The ETF has a beta of 0.96 and standard deviation of 24.49% for the trailing three-year period. With about 475 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) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY) tracks S&P 500 Index. IShares Core S&P 500 ETF has $283.36 billion in assets, SPDR S&P 500 ETF has $344.52 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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SPDR Russell 1000 Low Volatility Focus ETF (ONEV): ETF Research Reports
 
HP Inc. (HPQ) : Free Stock Analysis Report
 
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Willis Towers Watson Public Limited Company (WTW) : Free Stock Analysis Report
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
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