SSgA expands advanced beta ETF offering
State Street Global Advisors (SSgA) has launched a suite of advanced beta SPDR ETFs designed to combine the performance of quality, value and low volatility strategies.
According to SSgA, the aim is “to provide investors the potential diversification benefits of a multi-factor approach in an objective, transparent and consistent manner”.
The nine new ETFs, which are all trading on the NYSE Arca as of 12 June 2014, are:
SPDR MSCI World Quality Mix ETF (QWLD)
SPDR MSCI EAFE Quality Mix ETF (QEFA)
SPDR MSCI Emerging Markets Quality Mix ETF (QEMM)
SPDR MSCI Australia Quality Mix ETF (QAUS)
SPDR MSCI Canada Quality Mix ETF (QCAN)
SPDR MSCI Germany Quality Mix ETF (QDEU)
SPDR MSCI Japan Quality Mix ETF (QJPN)
SPDR MSCI Spain Quality Mix ETF (QESP)
SPDR MSCI United Kingdom Quality Mix ETF (QGBR)
"Advanced beta strategies are a valuable tool in today's market as they blend both passive and active investment styles," says James Ross, executive vice president and global head of SPDR ETFs at State Street Global Advisors. "Our new SPDR MSCI Quality Mix ETFs use multi-factor strategies constructed by combining three MSCI Factor Indices with different risk-return profiles and correlations. The concept of multi-factor holds appeal with a majority of investors as an opportunity to manage risk through combined factor tilts and potentially enhance the resilience of their portfolio through strategic exposure."
Advanced beta, also known as alternative or smart beta, refers to a set of approaches that deviate from the traditional cap-weighted model and instead weight indices or securities based on alternative rules-based methodologies. According to a recent SSgA study titled, Beyond Active and Passive, Advanced Beta Comes of Age, 65 per cent of institutional investors from North America and Europe are planning to adopt multi-factor advanced beta strategies, and nearly 70 per cent agree that combining several targeted market exposures as part of an advanced beta offering makes for a more refined product.
"The ability to combine factors opens up new opportunities for investors and is growing in popularity for its diversification benefits," says Diana Tidd, managing director and head of the MSCI index business in the Americas. "The MSCI Quality Mix Indexes are another example of our ability to deliver innovative index tools that meet the increasingly sophisticated needs of clients. We look forward to continuing to work with State Street as they expand their SPDR MSCI Quality Mix-based ETF offering."
Designed to represent the performance of quality, value and low volatility factor strategies across global markets in a single composite index, the MSCI Quality Mix Indexes are an equal weighted combination of the MSCI Value Weighted, MSCI Minimum Volatility and MSCI Quality Indexes.
All nine SPDR MSCI Quality Mix ETFs feature an expense ratio of 0.30 per cent.
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