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Is SPDR MSCI USA StrategicFactors ETF (QUS) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the SPDR MSCI USA StrategicFactors ETF (QUS - Free Report) is a smart beta exchange traded fund launched on 04/15/2015.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is managed by State Street Global Advisors, and has been able to amass over $970.68 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, QUS seeks to match the performance of the MSCI USA Factor Mix A-Series Index.
The MSCI USA Factor Mix A-Series Index measures the equity market performance of large and mid-cap companies across the U.S. equity market. It aims to represent the performance of a combination of three factors: value, quality, and low volatility.
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.
It has a 12-month trailing dividend yield of 1.60%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For QUS, it has heaviest allocation in the Information Technology sector --about 26.40% of the portfolio --while Healthcare and Financials round out the top three.
Looking at individual holdings, Microsoft Corporation (MSFT - Free Report) accounts for about 2.94% of total assets, followed by Apple Inc. (AAPL - Free Report) and Unitedhealth Group Incorporated (UNH - Free Report) .
The top 10 holdings account for about 20.39% of total assets under management.
Performance and Risk
The ETF has added roughly 5.26% and is down about -4.28% so far this year and in the past one year (as of 02/07/2023), respectively. QUS has traded between $101.25 and $126.71 during this last 52-week period.
The ETF has a beta of 0.91 and standard deviation of 24.08% for the trailing three-year period, making it a medium risk choice in the space. With about 627 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI USA StrategicFactors ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $309.67 billion in assets, SPDR S&P 500 ETF has $385.44 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 Blend.
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 SPDR MSCI USA StrategicFactors ETF (QUS) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the SPDR MSCI USA StrategicFactors ETF (QUS - Free Report) is a smart beta exchange traded fund launched on 04/15/2015.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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
The fund is managed by State Street Global Advisors, and has been able to amass over $970.68 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, QUS seeks to match the performance of the MSCI USA Factor Mix A-Series Index.
The MSCI USA Factor Mix A-Series Index measures the equity market performance of large and mid-cap companies across the U.S. equity market. It aims to represent the performance of a combination of three factors: value, quality, and low volatility.
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.
It has a 12-month trailing dividend yield of 1.60%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For QUS, it has heaviest allocation in the Information Technology sector --about 26.40% of the portfolio --while Healthcare and Financials round out the top three.
Looking at individual holdings, Microsoft Corporation (MSFT - Free Report) accounts for about 2.94% of total assets, followed by Apple Inc. (AAPL - Free Report) and Unitedhealth Group Incorporated (UNH - Free Report) .
The top 10 holdings account for about 20.39% of total assets under management.
Performance and Risk
The ETF has added roughly 5.26% and is down about -4.28% so far this year and in the past one year (as of 02/07/2023), respectively. QUS has traded between $101.25 and $126.71 during this last 52-week period.
The ETF has a beta of 0.91 and standard deviation of 24.08% for the trailing three-year period, making it a medium risk choice in the space. With about 627 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI USA StrategicFactors ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $309.67 billion in assets, SPDR S&P 500 ETF has $385.44 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 Blend.
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.