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Is Vident U.S. Equity Strategy ETF (VUSE) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Vident U.S. Equity Strategy ETF (VUSE - Free Report) is a smart beta exchange traded fund launched on 01/22/2014.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Vident Financial, and has been able to amass over $569.70 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the Vident Core U.S. Equity Fund Index.
The Vident U.S. Quality Index is a rules-based, systematic strategy index comprised of equity securities principally traded in the U.S. market of issuers domiciled in the United States.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.50% for VUSE, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.04%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 25.90% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Adobe Inc (ADBE - Free Report) accounts for about 2.25% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Broadcom Inc (AVGO - Free Report) .
Its top 10 holdings account for approximately 20.74% of VUSE's total assets under management.
Performance and Risk
The ETF has added about 5.64% and was up about 24.08% so far this year and in the past one year (as of 05/17/2024), respectively. VUSE has traded between $43.89 and $54.41 during this last 52-week period.
The fund has a beta of 1.11 and standard deviation of 18.17% for the trailing three-year period, which makes VUSE a medium risk choice in this particular space. With about 127 holdings, it effectively diversifies company-specific risk.
Alternatives
Vident U.S. Equity Strategy ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $10.04 billion in assets, iShares Core S&P U.S. Value ETF has $17.49 billion. DFAT has an expense ratio of 0.28% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Vident U.S. Equity Strategy ETF (VUSE) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Vident U.S. Equity Strategy ETF (VUSE - Free Report) is a smart beta exchange traded fund launched on 01/22/2014.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Vident Financial, and has been able to amass over $569.70 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the Vident Core U.S. Equity Fund Index.
The Vident U.S. Quality Index is a rules-based, systematic strategy index comprised of equity securities principally traded in the U.S. market of issuers domiciled in the United States.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.50% for VUSE, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.04%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 25.90% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Adobe Inc (ADBE - Free Report) accounts for about 2.25% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Broadcom Inc (AVGO - Free Report) .
Its top 10 holdings account for approximately 20.74% of VUSE's total assets under management.
Performance and Risk
The ETF has added about 5.64% and was up about 24.08% so far this year and in the past one year (as of 05/17/2024), respectively. VUSE has traded between $43.89 and $54.41 during this last 52-week period.
The fund has a beta of 1.11 and standard deviation of 18.17% for the trailing three-year period, which makes VUSE a medium risk choice in this particular space. With about 127 holdings, it effectively diversifies company-specific risk.
Alternatives
Vident U.S. Equity Strategy ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $10.04 billion in assets, iShares Core S&P U.S. Value ETF has $17.49 billion. DFAT has an expense ratio of 0.28% and IUSV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.