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Is ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) a Strong ETF Right Now?
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Making its debut on 02/03/2015, smart beta exchange traded fund ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - Free Report) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
Because the fund has amassed over $1.56 billion, this makes it one of the average sized ETFs in the Style Box - Mid Cap Value. REGL is managed by Proshares. Before fees and expenses, this particular fund seeks to match the performance of the S&P MidCap 400 Dividend Aristocrats Index.
The S&P MidCap 400 Dividend Aristocrats Index targets companies that are currently members of the S&P MidCap 400 Index and have increased dividend payments each year for at least 15 years.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.40%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 31.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Utilities and Industrials round out the top three.
Looking at individual holdings, Toro Co (TTC - Free Report) accounts for about 2.33% of total assets, followed by Carlisle Cos Inc (CSL - Free Report) and Sonoco Products Co (SON - Free Report) .
Its top 10 holdings account for approximately 19.91% of REGL's total assets under management.
Performance and Risk
The ETF has added roughly 7.63% so far this year and is up about 10.44% in the last one year (as of 07/23/2024). In the past 52-week period, it has traded between $63.72 and $79.05.
The ETF has a beta of 0.84 and standard deviation of 16.30% for the trailing three-year period, making it a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
ProShares S&P MidCap 400 Dividend Aristocrats ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $28.56 billion in assets, Vanguard Dividend Appreciation ETF has $81.43 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 - Mid 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 ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) a Strong ETF Right Now?
Making its debut on 02/03/2015, smart beta exchange traded fund ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - Free Report) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
Because the fund has amassed over $1.56 billion, this makes it one of the average sized ETFs in the Style Box - Mid Cap Value. REGL is managed by Proshares. Before fees and expenses, this particular fund seeks to match the performance of the S&P MidCap 400 Dividend Aristocrats Index.
The S&P MidCap 400 Dividend Aristocrats Index targets companies that are currently members of the S&P MidCap 400 Index and have increased dividend payments each year for at least 15 years.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.40%, making it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.40%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 31.40% of the portfolio, the fund has heaviest allocation to the Financials sector; Utilities and Industrials round out the top three.
Looking at individual holdings, Toro Co (TTC - Free Report) accounts for about 2.33% of total assets, followed by Carlisle Cos Inc (CSL - Free Report) and Sonoco Products Co (SON - Free Report) .
Its top 10 holdings account for approximately 19.91% of REGL's total assets under management.
Performance and Risk
The ETF has added roughly 7.63% so far this year and is up about 10.44% in the last one year (as of 07/23/2024). In the past 52-week period, it has traded between $63.72 and $79.05.
The ETF has a beta of 0.84 and standard deviation of 16.30% for the trailing three-year period, making it a medium risk choice in the space. With about 50 holdings, it has more concentrated exposure than peers.
Alternatives
ProShares S&P MidCap 400 Dividend Aristocrats ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $28.56 billion in assets, Vanguard Dividend Appreciation ETF has $81.43 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 - Mid 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.