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Is Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
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Making its debut on 02/20/2007, smart beta exchange traded fund Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) provides investors broad exposure to the Currency ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. UUP has been able to amass assets over $1.13 billion, making it the largest ETF in the Currency ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return.
The Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange.
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 on par with most peer products in the space, this ETF has annual operating expenses of 0.77%.
It's 12-month trailing dividend yield comes in at 0.88%.
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.
Taking into account individual holdings, Nybot Finex United States Dollar Index Future accounts for about 98.16% of the fund's total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and United States Treasury Bill.
The top 10 holdings account for about 198.83% of total assets under management.
Performance and Risk
Year-to-date, the Invesco DB US Dollar Index Bullish ETF has added roughly 0.25% so far, and was up about 6.95% over the last 12 months (as of 04/03/2023). UUP has traded between $26.46 and $30.67 in this past 52-week period.
UUP has a beta of -0.15 and standard deviation of 7.29% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 9 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DB US Dollar Index Bullish ETF is an excellent option for investors seeking to outperform the Currency ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust Global Tactical Commodity Strategy ETF (FTGC - Free Report) tracks N/A and the Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF (PDBC - Free Report) tracks N/A. First Trust Global Tactical Commodity Strategy ETF has $2.97 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $5.66 billion. FTGC has an expense ratio of 0.95% and PDBC charges 0.62%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Currency ETFs.
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 Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
Making its debut on 02/20/2007, smart beta exchange traded fund Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) provides investors broad exposure to the Currency ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. UUP has been able to amass assets over $1.13 billion, making it the largest ETF in the Currency ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return.
The Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange.
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 on par with most peer products in the space, this ETF has annual operating expenses of 0.77%.
It's 12-month trailing dividend yield comes in at 0.88%.
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.
Taking into account individual holdings, Nybot Finex United States Dollar Index Future accounts for about 98.16% of the fund's total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and United States Treasury Bill.
The top 10 holdings account for about 198.83% of total assets under management.
Performance and Risk
Year-to-date, the Invesco DB US Dollar Index Bullish ETF has added roughly 0.25% so far, and was up about 6.95% over the last 12 months (as of 04/03/2023). UUP has traded between $26.46 and $30.67 in this past 52-week period.
UUP has a beta of -0.15 and standard deviation of 7.29% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 9 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DB US Dollar Index Bullish ETF is an excellent option for investors seeking to outperform the Currency ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust Global Tactical Commodity Strategy ETF (FTGC - Free Report) tracks N/A and the Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF (PDBC - Free Report) tracks N/A. First Trust Global Tactical Commodity Strategy ETF has $2.97 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $5.66 billion. FTGC has an expense ratio of 0.95% and PDBC charges 0.62%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Currency ETFs.
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.