Harnessing the performance and diversification potential of factor investing requires using exposures that have been thoughtfully constructed and funds that are implemented with precision. State Street’s SPDR® smart beta ETFs are built in partnership with the world’s leading index providers and fueled by expertise that comes from more than 25 years of smart beta experience.
Smart beta ETFs are a natural extension of our skill and experience as a premier manager of indexed strategies. We are the creator of the world’s first ETFs1 and introduced one of the earliest smart beta institutional strategies in 1993. Since then we have uncovered research-backed insights and formed strong opinions about how to efficiently harvest factor premia and implement them in a portfolio using ETFs.
Investors are using smart beta ETFs to seek alpha, improve diversification, search for yield, mitigate volatility and lower costs.
Our SPDR smart beta ETFs are developed, refined and maintained through strong partnerships with the world’s leading index providers. We work closely with them to help ensure that the indices we use to define our smart beta ETFs capture factor premia in the most efficient way possible.
Our partnerships with index providers don’t end once a fund has been launched. We continually examine the exposures to help ensure that our ETFs deliver the expected factor premia amid evolving market conditions. We provide research-driven insights about ways to improve trading, liquidity and turnover.
These core beliefs guide our approach to constructing smart beta ETFs:
This creates opportunities to outperform using transparent, rules-based investment processes to harvest these premia.
Core factor investing should account for cyclicality of factor performance; multi-factor approaches may provide diversification benefits and offer the potential for improved long-term consistency.
An outcome-orientated implementation approach is crucial because performance can vary across factors over long periods.
For investors seeking to access dividend stability and growth as a potential driver of outperformance, our suite of Dividend Aristocrats strategies offers a range of regional exposures.
Across a range of smart beta strategies, our ETFs allow investors to target factor premia that can deliver superior risk-adjusted returns.
SPDR smart beta ETFs reflect our rigorous attention to the many details—from design to execution—that add up to important performance and diversification benefits for investors.