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Is Franklin U.S. Equity Index ETF (USPX) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Franklin U.S. Equity Index ETF (USPX - Free Report) debuted on 06/01/2016, and offers broad exposure to the Style Box - All Cap Blend category of the market.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.06 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. USPX is managed by Franklin Templeton Investments. Before fees and expenses, this particular fund seeks to match the performance of the MORNINGSTAR US TARGET MARKET EXPOSURE ID.
The Morningstar US Target Market Exposure Index targets large and mid-capitalization U.S. stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization.
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.
Annual operating expenses for USPX are 0.03%, which makes it one of the least expensive products in the space.
USPX's 12-month trailing dividend yield is 1.30%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For USPX, it has heaviest allocation in the Information Technology sector --about 29.10% of the portfolio --while Financials and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 6.78% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
Its top 10 holdings account for approximately 30.85% of USPX's total assets under management.
Performance and Risk
The ETF has added about 5.37% and is up roughly 23.47% so far this year and in the past one year (as of 04/23/2024), respectively. USPX has traded between $35.23 and $45.88 during this last 52-week period.
The ETF has a beta of 0.88 and standard deviation of 16.95% for the trailing three-year period. With about 588 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Equity Index 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 $51.65 billion in assets, Vanguard Total Stock Market ETF has $371.12 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 Franklin U.S. Equity Index ETF (USPX) a Strong ETF Right Now?
A smart beta exchange traded fund, the Franklin U.S. Equity Index ETF (USPX - Free Report) debuted on 06/01/2016, and offers broad exposure to the Style Box - All Cap Blend category of the market.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.06 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. USPX is managed by Franklin Templeton Investments. Before fees and expenses, this particular fund seeks to match the performance of the MORNINGSTAR US TARGET MARKET EXPOSURE ID.
The Morningstar US Target Market Exposure Index targets large and mid-capitalization U.S. stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization.
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.
Annual operating expenses for USPX are 0.03%, which makes it one of the least expensive products in the space.
USPX's 12-month trailing dividend yield is 1.30%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For USPX, it has heaviest allocation in the Information Technology sector --about 29.10% of the portfolio --while Financials and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 6.78% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
Its top 10 holdings account for approximately 30.85% of USPX's total assets under management.
Performance and Risk
The ETF has added about 5.37% and is up roughly 23.47% so far this year and in the past one year (as of 04/23/2024), respectively. USPX has traded between $35.23 and $45.88 during this last 52-week period.
The ETF has a beta of 0.88 and standard deviation of 16.95% for the trailing three-year period. With about 588 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Equity Index 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 $51.65 billion in assets, Vanguard Total Stock Market ETF has $371.12 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.