If you’re interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the SPDR Russell 1000 Yield Focus ETF (ONEY – Free Report) , 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 $820.40 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
Large cap companies 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.
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. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however 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 2.77%.
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 Financials sector–about 17.10% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Hp Inc. (HPQ – Free Report) accounts for about 2.09% of total assets, followed by Phillips 66 (PSX – Free Report) and T. Rowe Price Group (TROW – Free Report) .
The top 10 holdings account for about 12.89% 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 …….