State Street Global Advisors (SSGA) has expanded its smart beta funds range with the launch of a global low-volatility Ucits ETF, which will see to benefit from the safest names in the Stoxx Global 1800 index.
The new ETF, which is formally called SPDR Stoxx Global Low Volatility Ucits ETF, will track the Stoxx Global Low Risk Weighted Diversified 200 index, which represents the least volatile companies after accounting for adequate diversification.
This benchmark provides broad exposure to the world’s most developed markets drawn from the Stoxx Europe 600, Stoxx North America 600 and Stoxx Asia/Pacific 600 indices.
Its main objective is to track the performance of global equity securities that have shown the lowest level of historic volatility. It has a maximum stock weighting at the lower of 2% and 25x its weight in the parent index, and a maximum industry weighting of 25%.
Country weights greater than 2.5% in the parent index can deviate by more or less than 5%, while countries less than 2.5% are capped at three times their weight in the parent index. It is rebalanced quarterly.
Commenting on the launch, Matteo Andreetto, head of SPDR ETF business for EMEA at SSGA said: ‘Market volatility has become a big challenge for investors, especially during the current pandemic.
‘Our family of smart beta low-volatility ETFs, which follow simple, rules-based methodologies, allow investors to modify their portfolios to better reflect their ongoing return-risk appetite in their strategic allocation.’
The SPDR Stoxx Global Low Volatility Ucits ETF has a TER of 0.30%. It has had a primary listing on Euronext Amsterdam since Monday and will have a secondary listing on the London Stock Exchange on Tuesday.