The SPDR Russell 1000 Yield Focus ETF (ONEY) was launched on 12/02/2015, and is a passively managed exchange traded fund designed to offer 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 $726.16 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 fall in the large cap category tend to 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.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
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%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 3.35%.
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 17.70% of the portfolio. Energy and Materials round out the top three.
Looking at individual holdings, Pioneer Natural Resources Co (PXD) accounts for about 1.91% of total assets, followed by Devon Energy Corp (DVN) and Diamondback Energy Inc (FANG).
The top 10 holdings account for about 14.02% 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 1.94% so far this year and is down about -1.93% in the last one year (as of 11/27/2023). In the past 52-week period, it has traded between $86.22 and $102.43.
The ETF has a beta of 1.13 and standard deviation of 18.08% for the trailing three-year period. With about 302 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 sufficient 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 $50.62 billion in assets, Vanguard Value ETF has $100.31 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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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