Is SPDR Russell 1000 Momentum Focus ETF (ONEO) a Strong ETF Right Now?
Smart Beta ETF report for ONEO
A smart beta exchange traded fund, the SPDR Russell 1000 Momentum Focus ETF (ONEO) debuted on 12/02/2015, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $333.68 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Blend. ONEO is managed by State Street Global Advisors. This particular fund, before fees and expenses, seeks to match the performance of the Russell 1000 Momentum Focused Factor Index.
The Russell 1000 Momentum Focused Factor Index reflects the performance of a segment of large-capitalization U.S. equity securities demonstrating a combination of core factors with a focus factor comprising high momentum 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.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.19%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 19.50% of the portfolio. Industrials and Financials round out the top three.
When you look at individual holdings, Hp Inc. (HPQ) accounts for about 1.11% of the fund's total assets, followed by Dell Technologies Inc Class C (DELL) and Quanta Services Inc. (PWR).
ONEO's top 10 holdings account for about 6.08% of its total assets under management.
Performance and Risk
The ETF has gained about 0% and is up about 26.12% so far this year and in the past one year (as of 01/04/2022), respectively. ONEO has traded between $84.65 and $107.45 during this last 52-week period.
ONEO has a beta of 1.12 and standard deviation of 23.77% for the trailing three-year period. With about 906 holdings, it effectively diversifies company-specific risk.
SPDR Russell 1000 Momentum 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 $336.81 billion in assets, SPDR S&P 500 ETF has $455.35 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.
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 Momentum Focus ETF (ONEO): ETF Research Reports
HP Inc. (HPQ): Free Stock Analysis Report
Quanta Services, Inc. (PWR): Free Stock Analysis Report
Dell Technologies Inc. (DELL): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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