Exchange traded funds emphasizing the value factor have been laggards this year, but that does not mean this ETF genre is bereft of opportunity for investors.
In the case of the SPDR MFS Systematic Value ETF (NYSEArca: SYV), active management is helping this value ETF excel this year. Year-to-date, SYV is up 2.7%, well ahead of the 4.8% lost by the S&P 500.
SYV is issued by State Street’s (NYSE: STT) State Street Global Advisors in partnership with asset management giant MFS Investment Management. Two other actively managed ETFs are included in the State Street/MFS suite. The selection process behind the ETFs is combination of fundamental and quantitative research, courtesy of MFS.
Although some of the largest asset managers and mutual fund issuers have filed plans with regulators to roll out actively managed ETFs, in many cases, those funds have not seen the light of day. In what appears to be a growing trend, some asset managers that have previously not been directly involved in ETFs but find the industry’s exponential growth too compelling to ignore are partnering with established ETF providers. [New ETFs From State Street, MFS]
SYV’s goal is to top the Russell 1000 Growth Index.
“The fund’s price to book is 1.64 times, with a P/E of 12.92 and has an expected 3 to 5 year earnings growth rate of 13.50%. Distributions are quarterly; the current dividend yield is 1.57%. This is well short of the index yield of 2.66%, however, the entire Russell 1000 value fund is far more comprehensive, with nearly 700 companies. The fund has selected only 50 companies from those in Russell Value index,” according to a Seeking Alpha post.
SYV allocates just over 29% of its weight to financial services stocks while health care, energy and consumer discretionary names combine for nearly 39% of the ETF’s weight. Eight of SYV’s top 10 holdings hail from those sectors with the two outliers being industrial stocks.
SYV charges 0.6% per year, or $60 per $10,000 invested, which is fairly reasonable among equity-based actively managed ETFs.
SPDR MFS Systematic Value Equity ETF
