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State Street Global Advisors (SSgA)*, the asset management business of State Street Corporation (NYSE: STT), today announced that the SPDR S&P 1500 Value Tilt ETF (Symbol: VLU) and the SPDR S&P 1500 Momentum Tilt ETF (Symbol: MMTM) began trading on the NYSE Arca on October 25, 2012. The new SPDR ETFs offer investors an opportunity to access potential sources of outperformance with advanced indexing methodologies that reconfigure how index components are weighted.
The SPDR S&P 1500 Value Tilt ETF seeks to track the performance of the S&P 1500 Low Valuation Tilt Index. The Index applies an alternative weighting methodology to the S&P 1500 Index so that stocks with relatively low valuations are overweight relative to the S&P 1500 Index and stocks with relatively high valuations are underweight. In constructing the Index, Standard & Poor’s, Inc. estimates the valuation of each stock in the S&P 1500 Index based on the ratio of its price to its level of earnings, cash flow, sales, book value, and dividends.
The weight of each stock in the Index is proportionate to its market capitalization and sub-portfolio allocation. The Index is rebalanced annually, and as of 9/30/12 it included approximately 1,472 securities. The SPDR S&P 1500 Value Tilt ETF’s expense ratio is 0.35 percent.
“Providing advisors and investors with unique opportunities to take advantage of sources of outperformance relative to standard cap-weighted indexes and combining the advantages of value and momentum tilt investing with the benefits of exchange traded funds, our new SPDR Tilt ETFs further illustrate the growing popularity of advanced beta investment strategies,” said James Ross, senior managing director and global head of SPDR Exchange Traded Funds and head of Intermediary Distribution at State Street Global Advisors. “We have strong expertise in the advanced beta space which we define as an objective, consistent, transparent process for capturing some investment exposure, while retaining the benefits of traditional indexing.”