Should SPDR Russell 1000 Low Volatility Focus ETF (ONEV) Be on Your Investing Radar?
Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the SPDR Russell 1000 Low Volatility Focus ETF (ONEV), a passively managed exchange traded fund launched on 12/02/2015.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $445.25 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.20%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.91%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Consumer Discretionary sector--about 18.70% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Sysco Corporation (SYY) accounts for about 1.07% of total assets, followed by Baxter International Inc. (BAX) and Equity Residential (EQR).
The top 10 holdings account for about 8.97% of total assets under management.
Performance and Risk
ONEV seeks to match the performance of the Russell 1000 Low Volatility Focused Factor Index before fees and expenses. 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.
The ETF has lost about -1.45% so far this year and was up about 9.49% in the last one year (as of 05/02/2018). In the past 52-week period, it has traded between $68.46 and $76.42.
With about 420 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Russell 1000 Low Volatility Focus ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ONEV is a good option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $142.94 B in assets, SPDR S&P 500 ETF has $252.80 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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-SP 500 TR (SPY): ETF Research Reports
ISHARS-SP500 (IVV): ETF Research Reports
SPDR-R1000 LVF (ONEV): ETF Research Reports
Sysco Corporation (SYY) : Free Stock Analysis Report
Baxter International Inc. (BAX) : Free Stock Analysis Report
Equity Residential (EQR) : Free Stock Analysis Report
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