State Street’s (NYSE: STT) State Street Global Advisors (SSgA) unit, one of the largest issuers of exchange traded funds, added to its lineup of strategic beta ETFs today with the debut of the SPDR MSCI Quality Mix USA ETF (NYSEArca: QUS).
The new ETF tracks the equally-weighted MSCI USA Quality Mix A-Series Index, which is a combination of the MSCI USA Value Weighted, MSCI USA Minimum Volatility and MSCI USA Quality Indexes. As of Feb. 27, the index was home to 631 large- and mid-cap companies, according to a statement issued by SSgA.
The quality factor has become increasingly among issuers promoting factor-based ETFs. There are now over 40 quality factor ETFs, both U.S. and international, available to U.S. investors. Quality encompasses traits such as dividends, earnings growth, return on equity and balance sheet strength. [Quality ETFs on the Rise]
The quality factor “captures excess returns to stocks that are characterized by low debt, stable earnings growth and other ‘quality’ metrics,” according to MSCI.
Bolstering the case for quality investing, those other metrics include high returns on equity, stable dividend growth, robust cash flow, lack of financial leverage, sturdy balance sheets and strong management, notes MSCI. [Quality With Emerging Markets ETFs]
SSgA and MSCI have partnered on several other quality factor ETFs, including the SPDR MSCI Spain Quality Mix ETF (NYSEArca: QESP) and the SPDR MSCI Australia Quality Mix ETF (NYSEArca: QAUS), as well as the SPDR MSCI EAFE Quality Mix ETF (NYSEArca: QEFA) and SPDR MSCI Emerging Markets Quality Mix ETF (NYSEArca: QEMM).
SSGA’s suite of Quality Mix SPDR ETFs now includes 13 ETFs offering access to developed, emerging, single country and global markets, according to the statement.