State Street Global Advisors has further expanded its SPDR ETF range with a global value fund, which represents high value exposure companies while attempting to avoid 'value traps'.
The SPDR MSCI World Value UCITS ETF will track the MSCI World Value Exposure Select index, which includes large and mid-cap securities across 23 developed markets and is designed to represent the performance of companies with "relatively higher value exposure", while avoiding "poor quality companies" and value traps.
It consists of the top 350 securities according to the highest combined 'Value Select' score and has a 5% maximum stock weighting, is rebalanced semi-annually and utilises a 50% turnover buffer. The indices incorporate both quality and value metrics, as opposed the enhanced value indices, which only utilise the latter.
The ETF will be available on the London Stock Exchange in both USD and GBP from 4 September 2020 with a total expense ratio of 0.25%.
Matteo Andreetto, head of SPDR ETF business, EMEA, said: "Investors using value strategies to take advantage of cheap stocks need to protect their portfolios against stocks that are 'cheap for a reason'.
"Our suite of ETFs tracking the MSCI Value Exposure Select indices enables investors to access strong value factor exposure, while seeking to avoid value traps using a light quality touch."
Ryan Reardon, ETF strategist at SPDR, added: "Against a Covid-19 backdrop, investors are looking for geographical diversification in select value strategies. Currently, value looks cheap based on valuation spreads, and value stocks often perform well in the recovery phase following a recession.
"Given uncertainty around the shape and timing of the recovery, value investing offers a relatively attractive complement to a well-diversified portfolio."