Should SPDR Russell 1000 Yield Focus ETF (ONEY) Be on Your Investing Radar?
Style Box ETF report for ONEY
Launched on 12/02/2015, the SPDR Russell 1000 Yield Focus ETF (ONEY) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $675.60 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 2.85%.
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 Financials sector--about 20.90% of the portfolio. Consumer Staples and Real Estate round out the top three.
Looking at individual holdings, Progressive Corporation (PGR) accounts for about 1.99% of total assets, followed by Hp Inc. (HPQ) and Best Buy Co. Inc. (BBY).
The top 10 holdings account for about 12.49% of total assets under management.
Performance and Risk
ONEY seeks to match the performance of the Russell 1000 Yield Focused Factor Index before fees and expenses. The Russell 1000 Yield 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 high yield characteristics.
The ETF has added about 30.37% so far this year and was up about 57% in the last one year (as of 10/05/2021). In the past 52-week period, it has traded between $60.19 and $99.36.
The ETF has a beta of 1.21 and standard deviation of 28.10% for the trailing three-year period. With about 280 holdings, it effectively diversifies company-specific risk.
SPDR Russell 1000 Yield 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, ONEY is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $53.60 billion in assets, Vanguard Value ETF has $82.29 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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 Russell 1000 Yield Focus ETF (ONEY): ETF Research Reports
HP Inc. (HPQ): Free Stock Analysis Report
Best Buy Co., Inc. (BBY): Free Stock Analysis Report
The Progressive Corporation (PGR): Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
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