Should SPDR Russell 1000 Momentum Focus ETF (ONEO) Be On Your Investing Radar?

Launched on 12/02/2015, the SPDR Russell 1000 Momentum Focus ETF (NYSE:ONEO) 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 $574.07 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies 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.

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

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 1.64%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Consumer Discretionary sector--about 20.10% of the portfolio. Information Technology and Industrials round out the top three.

Looking at individual holdings, Micron Technology Inc. (NASDAQ:MU) accounts for about 1.08% of total assets, followed by Lear Corporation (LEA) and Aptiv Plc (APTV).

The top 10 holdings account for about 7.15% of total assets under management.

Performance and Risk

ONEO seeks to match the performance of the Russell 1000 Momentum Focused Factor Index before fees and expenses. 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.

The ETF has lost about -0.39% so far this year and was up about 11.92% in the last one year (as of 04/27/2018). In the past 52-week period, it has traded between $67.64 and $77.24.

With about 881 holdings, it effectively diversifies company-specific risk.

Alternatives

SPDR Russell 1000 (NYSE:SPLG) Momentum 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, ONEO is a reasonable option for those seeking exposure to the Large Cap ETFs 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 (NYSE:SPY) track a similar index. While iShares Core S&P 500 ETF has $143.38 B in assets, SPDR S&P 500 (MX:SPY) ETF has $257.74 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

Bottom-Line

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.