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Is Oshares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Oshares U.S. Quality Dividend ETF (OUSA - Free Report) debuted on 07/14/2015, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $726.31 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA is managed by Oshares Etfs. Before fees and expenses, this particular fund seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.
The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.
OUSA's 12-month trailing dividend yield is 1.92%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
OUSA's heaviest allocation is in the Healthcare sector, which is about 24.60% of the portfolio. Its Information Technology and Consumer Staples round out the top three.
When you look at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 5.31% of the fund's total assets, followed by Procter & Gamble Co/the (PG - Free Report) and Verizon Communications Inc (VZ - Free Report) .
Its top 10 holdings account for approximately 39.6% of OUSA's total assets under management.
Performance and Risk
Year-to-date, the Oshares U.S. Quality Dividend ETF has lost about -14.69% so far, and is down about -4.51% over the last 12 months (as of 06/14/2022). OUSA has traded between $39.26 and $46.65 in this past 52-week period.
The ETF has a beta of 0.85 and standard deviation of 20.74% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
Oshares U.S. Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $50.85 billion in assets, Vanguard Value ETF has $92.52 billion. IWD has an expense ratio of 0.19% and VTV 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 - Large 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 Oshares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?
A smart beta exchange traded fund, the Oshares U.S. Quality Dividend ETF (OUSA - Free Report) debuted on 07/14/2015, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $726.31 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA is managed by Oshares Etfs. Before fees and expenses, this particular fund seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.
The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.
OUSA's 12-month trailing dividend yield is 1.92%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
OUSA's heaviest allocation is in the Healthcare sector, which is about 24.60% of the portfolio. Its Information Technology and Consumer Staples round out the top three.
When you look at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 5.31% of the fund's total assets, followed by Procter & Gamble Co/the (PG - Free Report) and Verizon Communications Inc (VZ - Free Report) .
Its top 10 holdings account for approximately 39.6% of OUSA's total assets under management.
Performance and Risk
Year-to-date, the Oshares U.S. Quality Dividend ETF has lost about -14.69% so far, and is down about -4.51% over the last 12 months (as of 06/14/2022). OUSA has traded between $39.26 and $46.65 in this past 52-week period.
The ETF has a beta of 0.85 and standard deviation of 20.74% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
Oshares U.S. Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $50.85 billion in assets, Vanguard Value ETF has $92.52 billion. IWD has an expense ratio of 0.19% and VTV 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 - Large 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.