State Street Global Advisors Expands Multi-Factor Advanced Beta ETFs Giving Investors Additional Options for Active Exposure
State Street Global Advisors (SSGA), the asset management arm of State Street Corporation (NYSE:STT) today announced the launch of three single-country advanced beta SPDR ETFs. These ETFs aim to represent the performance of a combination of three factors, quality, value and low volatility, with the objective of giving investors improved risk-adjusted return potential when investing in single-country markets. The new ETFs add to the existing nine multi-factor SPDR MSCI Quality Mix ETFs that were launched in June 2014.
The three new ETFs, which began trading on the NYSE Arca as of September 18, 2014, include:
- SPDR MSCI Mexico Quality Mix ETF (QMEX)
- SPDR MSCI South Korea Quality Mix ETF (QKOR)
- SPDR MSCI Taiwan Quality Mix ETF (QTWN)
“Our new SPDR MSCI Quality Mix ETFs provide investors with an opportunity to fine-tune their international exposure with a single-country portfolio that captures multiple investment themes,” said James Ross, executive vice president and global head of SPDR Exchange Traded Funds at State Street Global Advisors. “Multi-factor advanced beta strategies combine factor tilts that can help achieve diversification by using factors that have shown negative or low correlation. These exposures are appealing to investors as they can behave differently in similar market environments in terms of risk and return.”
Investors may look to each of the recently launched Quality Mix ETFs to add strategic elements to their core portfolio. The selection of exposures available range from international with the SPDR MSCI EAFE Quality Mix ETF (QEFA), which includes 22 markets in Europe, Australaisa and Far East countries, to emerging markets, with the SPDR MSCI Emerging Markets Quality Mix ETF (QEMM), which captures large- and mid-cap representation across 21 emerging markets countries and global with the SPDR MSCI World Quality Mix ETF (QWLD). Additional country specific funds include Australia (QAUS), Canada (QCAN), Germany (QDEU), Japan (QJPN), Spain (QESP) and the United Kingdom (QGBR). The funds give investors opportunities to consider access to precise multi-factor investment across markets.
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. 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 A-Series Indexes are an equal weighted combination of the MSCI Value Weighted, MSCI Minimum Volatility and MSCI Quality Indexes. The MSCI Minimum Volatility Index may be replaced with its corresponding MSCI Risk Weighted Index in the event that there is too much concentration or too few stocks in the index.
The three new SPDR MSCI Quality Mix ETFs feature an expense ratio of 0.40 percent.
For more information on these innovative advanced beta SPDR ETFs and the MSCI Quality Mix A-Series Index methodology, visit www.spdrs.com.
About SPDR Exchange Traded Funds
SPDR ETFs are a comprehensive family spanning an array of international and domestic asset classes. SPDR ETFs are managed by SSgA Funds Management, Inc., a registered investment adviser and wholly owned subsidiary of State Street Bank and Trust Company. The funds provide investors with the flexibility to select investments that are precisely aligned to their investment strategy. Recognized as an industry pioneer, State Street created the first US listed ETF in 1993 (SPDR S&P 500(R) – Ticker SPY) and has remained on the forefront of responsible innovation, as evidenced by the introduction of many ground-breaking products, including first-to-market launches with gold, international real estate, international fixed income, and sector ETFs. For more information, visit www.spdrs.com.
About State Street Global Advisors
State Street Global Advisors (SSgA) is a global leader in asset management. The firm is relied on by sophisticated investors worldwide for its disciplined investment process, powerful global investment platform and access to every major asset class, capitalization range and style. SSgA is the asset management business of State Street Corporation, one of the world’s leading providers of financial services to institutional investors.
In general, ETFs can be expected to move up or down in value with the value of the applicable index. Although ETF shares may be bought and sold on the exchange through any brokerage account, ETF shares are not individually redeemable from the Fund. Investors may acquire ETFs and tender them for redemption through the Fund in Creation Unit Aggregations only. Please see the prospectus for more details.
Passively managed funds invest by sampling the Index, holding a range of securities that, in the aggregate, approximates the full Index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance.
Risk associated with equity investing include stock values which may fluctuate in response to the activities of individual companies and general market and economic conditions.
A “value” style of investing emphasizes undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” equity securities are less than returns on other styles of investing or the overall stock market.
Although subject to the risks of common stocks, low volatility stocks are seen as having a lower risk profile than the overall markets. However, a fund that invests in low volatility stocks may not produce investment exposure that has lower variability to changes in such stocks’ price levels.
A “quality” style of investing emphasizes companies with high returns, stable earnings, and low financial leverage. This style of investing is subject to the risk that the past performance of these companies does not continue or that the returns on “quality” equity securities are less than returns on other styles of investing or the overall stock market.
Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations, all of which may be magnified in emerging markets.
Derivative investments may involve risks such as potential illiquidity of the markets and additional risk of loss of principal.
Investments in small/mid-sized companies may involve greater risks than in those of larger, better known companies.
Companies with large market capitalizations go in and out of favor based on market and economic conditions. Larger companies tend to be less volatile than companies with smaller market capitalizations. In exchange for this potentially lower risk, the value of the security may not rise as much as companies with smaller market capitalizations.
Non-diversified funds that focus on a relatively small number of securities tend to be more volatile than diversified funds and the market as a whole.
“SPDR” is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”) and has been licensed for use by State Street Corporation. No financial product offered by State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by S&P or its Affiliates, and S&P and its affiliates make no representation, warranty or condition regarding the advisability of buying, selling or holding units/shares in such products. Further limitations and important information that could affect investors’ rights are described in the prospectus for the applicable product.
Distributor: State Street Global Markets, LLC, member FINRA, SIPC, a wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates. Certain State Street affiliates provide services and receive fees from the SPDR ETFs.
Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus which contains this and other information, call 1-866-787-2257 or visit www.spdrs.com. Read it carefully.
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