State Street Global Advisors launches Smart Beta World Multi-Factor ETF
State Street Global Advisors (SSGA), the asset management business of State Street Corporation yesterday launched the SPDR® MSCI® World Quality Mix Fund on the Australian Securities Exchange (ASX).
The fund will track the MSCI® World Quality Mix Index, providing investors with access to an equally weighted combination of three factor indexes — MSCI Value Weighted Index, MSCI Minimum Volatility Index, and MSCI Quality Index.
Smart beta is a form of investment management that represents an evolution in indexing. Its passive attributes are derived from an easily replicated, transparent, rules-based, and cost-effective approach within a wide investment universe. It shares some similarities with active management, due to the active choice investors need to make about which factor exposures to target. These strategies can potentially outperform a standard market cap benchmark by using non-market cap security weights.
“We are delighted to launch our new SPDR ETF for clients in Australia. An allocation to a Quality Mix ETF can be made as either a supplementary or complementary decision to a standard market-cap weighted mandate, depending on the investor’s factor conviction, constraints and style,” said James MacNevin, senior vice president and head of the Intermediary Business Group for State Street Global Advisors, Asia Pacific.
“We’re now making access to this strategy easier for investors through the form of an ETF, gaining exposure and diversification in one simple trade.”
Theodore Niggli, managing director and head of Index Product for MSCI, Asia Pacific said, “We are very pleased that SSGA has chosen the MSCI® World Quality Mix Index for this multi-factor index-based ETF in Australia. While the MSCI single factor indexes have earned a risk premium over the long term, by combining three more defensive factors, the MSCI® World Quality Mix Index is designed to dampen the cyclicality of returns.”
SSGA launched the first ETF in Australia – the SPDR® S&P®/ASX 200 Fund (STW) and, more recently, launched the SPDR® S&P 500® ETF Trust (the world’s first ETF) on the ASX late last year. This fund further extends the diversified and thoughtfully selected range of ETFs available on offer.
