SSPY: Good For Bear Market, A Weaker Play In Recovery

Summary

• SSPY uses a research-based approach to reweighting the S&P 500 constituents, with attention paid to related business risks.
• My analysis revealed SSPY’s sophisticated methodology is supportive of a value tilt, which most likely contributed to SSPY’s relatively strong performance last year.
• Unfortunately, SSPY was incapable of beating IVV in the long run, also owing to its value exposure.
• SSPY does have a few notable advantages, but I would assign it to a group of the sophisticated vehicles I personally rate only a Hold.

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A great deal of attention has been devoted by investors to peculiar weighting schemas that are called "smart-beta" in financial lingo. And for good reason as labyrinthine weighting processes are perceived as instruments to outmaneuver conditional market-cap-weighted indices

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.