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Is WisdomTree U.S. Multifactor ETF (USMF) a Strong ETF Right Now?
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The WisdomTree U.S. Multifactor ETF (USMF - Free Report) was launched on 06/29/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Blend 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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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
USMF is managed by Wisdomtree, and this fund has amassed over $237.67 million, which makes it one of the average sized ETFs in the Style Box - All Cap Blend. USMF, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Multifactor Index.
The WisdomTree U.S. Multifactor Index is comprised of 200 U.S. companies with the highest composite scores based on two fundamental factors, value and quality measures, and two technical factors, momentum and correlation.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
USMF's 12-month trailing dividend yield is 1.41%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 27.20% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Vmware Inc accounts for about 1.38% of total assets, followed by International Business Machines Corp (IBM - Free Report) and Jabil Inc (JBL - Free Report) .
The top 10 holdings account for about 12.81% of total assets under management.
Performance and Risk
So far this year, USMF return is roughly 10.39%, and was up about 5.29% in the last one year (as of 12/05/2023). During this past 52-week period, the fund has traded between $35.65 and $41.12.
The ETF has a beta of 0.90 and standard deviation of 15.17% for the trailing three-year period. With about 201 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $46.70 billion in assets, Vanguard Total Stock Market ETF has $327.36 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 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 WisdomTree U.S. Multifactor ETF (USMF) a Strong ETF Right Now?
The WisdomTree U.S. Multifactor ETF (USMF - Free Report) was launched on 06/29/2017, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Blend 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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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
USMF is managed by Wisdomtree, and this fund has amassed over $237.67 million, which makes it one of the average sized ETFs in the Style Box - All Cap Blend. USMF, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Multifactor Index.
The WisdomTree U.S. Multifactor Index is comprised of 200 U.S. companies with the highest composite scores based on two fundamental factors, value and quality measures, and two technical factors, momentum and correlation.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
USMF's 12-month trailing dividend yield is 1.41%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 27.20% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Vmware Inc accounts for about 1.38% of total assets, followed by International Business Machines Corp (IBM - Free Report) and Jabil Inc (JBL - Free Report) .
The top 10 holdings account for about 12.81% of total assets under management.
Performance and Risk
So far this year, USMF return is roughly 10.39%, and was up about 5.29% in the last one year (as of 12/05/2023). During this past 52-week period, the fund has traded between $35.65 and $41.12.
The ETF has a beta of 0.90 and standard deviation of 15.17% for the trailing three-year period. With about 201 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $46.70 billion in assets, Vanguard Total Stock Market ETF has $327.36 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 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.