SPDR ETFs, the exchange-traded funds platform of State Street Global Advisors, has launched the SPDR S&P 500 Low Volatility ETF on the London Stock Exchange.
It is the first ETF in Europe to track this underlying Index.
The SPDR S&P 500 Low Volatility ETF, which is physically-backed, will give investors access to the 100 least volatile stocks in the S&P 500, providing a simple and transparent investment in a diversified portfolio of US large cap stocks with historically lower volatility.
This new ETF complements the existing SPDR US equity product range in Europe that includes the SPDR S&P 500 ETF, SPDR S&P 400 US Mid Cap ETF, and SPDR S&P US Dividend Aristocrats ETF.
The S&P 500 Low Volatility Index is rebalanced quarterly and includes 100 stocks of the S&P 500 Index that have had the lowest historical price volatility in the prior 252 trading days. The stocks are then weighted inversely proportional to the volatility, with the least volatile having higher weightings, and are each subject to a four per cent cap.
Scott Ebner, global head of product development at SPDR ETFs, says: “With the volatility in equity markets over the past couple of years, many clients are looking for ways to help reduce the potential drawdown impact of market retreats, while still participating in some of the upside of US equity investing. The SPDR S&P 500 Low Volatility ETF can be used in combination with other US equity exposures to adjust risks or as an alternative to traditional market capitalisation weighted index strategies.”
Forty-two SPDR ETFs are now listed on European exchanges including the London Stock Exchange and Deutsche Börse.
The SPDR S&P 500 Low Volatility is also registered for sale in Ireland, Italy, France, the Netherlands, Sweden and the UK.
