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 and ETF Expertise
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.
of smart beta and ETF experience
in equity smart beta assets for institutional clients
smart beta portfolio managers and researchers
As of June 30, 2020
Explore Smart Beta ETF Investing
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.
Our Investment Beliefs
These core beliefs guide our approach to constructing smart beta ETFs:
Factor premia exist and can be captured
This creates opportunities to outperform using transparent, rules-based investment processes to harvest these premia.
Factor cyclicality must be accounted for
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.
Portfolio design should meet investor objectives
An outcome-orientated implementation approach is crucial because performance can vary across factors over long periods.
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.
1 ETFs managed by State Street Global Advisors have the oldest inception dates within the US, Hong Kong, Australia, and Singapore. State Street Global Advisors launched the first ETF in the US on January 22, 1993; launched the first ETF in Hong Kong on November 11, 1999; launched the first ETF in Australia on August 24, 2001; and launched the first ETF in Singapore on April 11, 2002.
A Smart Beta strategy does not seek to replicate the performance of a specified cap-weighted index and as such may underperform such an index. The factors to which a Smart Beta strategy seeks to deliver exposure may themselves undergo cyclical performance. As such, a Smart Beta strategy may underperform the market or other Smart Beta strategies exposed to similar or other targeted factors. In fact, we believe that factor premia accrue over the long term (5-10 years), and investors must keep that long time horizon in mind when investing.
Investing involves risk including the risk of loss of principal.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third party
Diversification does not ensure a profit or guarantee against loss.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
Standard & Poor's®, S&P® and SPDR® are registered trademarks of Standard & Poor's Financial Services LLC (S&P); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by S&P Dow Jones Indices LLC (SPDJI) and sublicensed for certain purposes by State Street Corporation. State Street Corporation's financial products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and third party licensors and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability in relation thereto, including for any errors, omissions, or interruptions of any index.
Distributor: State Street Global Advisors Funds Distributors, LLC, member FINRA, SIPC, an indirect 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. ALPS Distributors, Inc., member FINRA, is the distributor for DIA, MDY and SPY, all unit investment trusts. ALPS Portfolio Solutions Distributor, Inc., member FINRA, is the distributor for Select Sector SPDRs. ALPS Distributors, Inc. and ALPS Portfolio Solutions Distributor, Inc. are not affiliated with State Street Global Advisors Funds Distributors, LLC.
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