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Should SPDR Russell 1000 Low Volatility Focus ETF (ONEV) Be on Your Investing Radar?

Launched on 12/02/2015, the SPDR Russell 1000 Low Volatility Focus ETF (ONEV) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by State Street Global Advisors. It has amassed assets over $563.60 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.20%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.66%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 17.60% of the portfolio. Information Technology and Financials round out the top three.

Looking at individual holdings, Hp Inc. (HPQ) accounts for about 1.23% of total assets, followed by Willis Towers Watson Public Limited Company (WTW) and Cognizant Technology Solutions Corporation Class A (CTSH).

The top 10 holdings account for about 7.8% 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 -9.76% so far this year and is down about -2.20% in the last one year (as of 07/27/2022). In the past 52-week period, it has traded between $94.73 and $114.25.

The ETF has a beta of 0.96 and standard deviation of 24.22% for the trailing three-year period. With about 476 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 reasonable option for those seeking exposure to the Style Box - Large Cap Blend 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 $290.02 billion in assets, SPDR S&P 500 ETF has $354.86 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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
 
Cognizant Technology Solutions Corporation (CTSH): 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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