State Street has announced that they will begin trading The SPDR Russell 2000 Low Volatility ETF (NYSEArca:SMLV) Thursday, February 21, 2013. The SPDR Russell 2000 Low Volatility ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Russell 2000 Low Volatility Index.
TOTAL ANNUAL FUND OPERATING EXPENSES: 0.25%
THE FUND’S PRINCIPAL INVESTMENT STRATEGY
In seeking to track the performance of the Russell 2000 Low Volatility Index (the “Index”), the Fund employs a sampling strategy, which means that the Fund is not required to purchase all of the securities represented in the Index. Instead, the Fund may purchase a subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index. The quantity of holdings in the Fund will be based on a number of factors, including asset size of the Fund. SSgA Funds Management, Inc. (“SSgA FM” or the “Adviser”), the investment adviser to the Fund, generally expects the Fund to hold less than the total number of securities in the Index, but reserves the right to hold as many securities as it believes necessary to achieve the Fund’s investment objective.
Under normal market conditions, the Fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the Index. The Fund will provide shareholders with at least 60 days notice prior to any material change in this 80% investment policy. In addition, the Fund may invest in equity securities that are not included in the Index, cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds (including money market funds advised by the Adviser).
The Index is part of the Russell-Axioma Factor Indexes and designed to deliver exposure to equity securities with low volatility. Volatility is a measure of a security’s variability in total returns based on its historic behavior. Low volatility securities are considered to have a lower return variability than the overall market and can be used by investors to adjust volatility exposure in a portfolio. To construct the Index, the Index starts with the Russell 2000® Index and selects securities to deliver focused exposure to low volatility securities, while controlling index turnover and minimizing exposure to non-target factors. The Index contains no more than 400 securities and is reconstituted monthly to maintain its focus on low volatility securities. Unlike more traditional equity market indexes which seek to track the performance of a specific segment of the equity market, the Index is intended to provide a specific factor exposure. Indexing may reduce the chance that the Fund will substantially outperform its Index but also may reduce some of the risks of active management, such as security selection. The Index is sponsored by Frank Russell Company (“Russell” or the “Index Provider”). The Index Provider determines the composition and relative weightings of the securities in the Index and publishes information regarding the market value of the Index. As of , 2013, there were approximately securities in the Index.
You can find the complete prospectus: HERE
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