SPDR Launches First S&P 500 Low-Vol ETF In Europe

October 04, 2012

State Street Global Advisors’ exchange-traded fund arm has launched the first ETF in Europe to track the S&P 500 low volatility index.  The listing comes amidst rising interest in index concepts offering exposure to defensive shares.

The physically backed ETF, which has been listed on the London Stock Exchange, invests in the 100 least volatile stocks from the S&P 500 index.

The ETF can be traded in sterling or US dollars and has a base currency (NAV) of US dollars. Its ticker for sterling trading is USLV and for US dollars is LOWV, while the total expense ratio is 0.35%.

The S&P 500 low volatility index is rebalanced quarterly and includes the 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 according to their volatility, with the least volatile shares having higher weightings. Individual stock holdings are subject to a 4% cap.

This is the first time European ETF investors will be able to access the S&P index, although a number of other low-volatility funds have been launched in the region. A US-listed ETF based on the S&P low-volatility index and provided by Powershares has met significant demand since its launch last year, with .

The launch brings the total SPDR ETF listings to 42 in Europe, across exchanges including the London Stock Exchange and Deutsche Börse.

Scott Ebner, global head of product development at SPDR ETFs, said in a statement: “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.”

 

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