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Is Franklin U.S. Equity Index ETF (USPX) a Strong ETF Right Now?
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The Franklin U.S. Equity Index ETF (USPX - Free Report) made its debut on 06/01/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Blend 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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.
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
Because the fund has amassed over $1.13 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. USPX is managed by Franklin Templeton Investments. This particular fund, before fees and expenses, 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
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 0.03%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.22%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 31.50% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.58% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 32.82% of total assets under management.
Performance and Risk
The ETF has added roughly 18.57% and it's up approximately 29.13% so far this year and in the past one year (as of 08/27/2024), respectively. USPX has traded between $35.85 and $49.48 during this last 52-week period.
The ETF has a beta of 0.89 and standard deviation of 16.47% for the trailing three-year period. With about 572 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Equity Index ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
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 $60.56 billion in assets, Vanguard Total Stock Market ETF has $425.61 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?
The Franklin U.S. Equity Index ETF (USPX - Free Report) made its debut on 06/01/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Blend 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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.
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
Because the fund has amassed over $1.13 billion, this makes it one of the larger ETFs in the Style Box - All Cap Blend. USPX is managed by Franklin Templeton Investments. This particular fund, before fees and expenses, 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
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 0.03%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.22%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 31.50% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.58% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 32.82% of total assets under management.
Performance and Risk
The ETF has added roughly 18.57% and it's up approximately 29.13% so far this year and in the past one year (as of 08/27/2024), respectively. USPX has traded between $35.85 and $49.48 during this last 52-week period.
The ETF has a beta of 0.89 and standard deviation of 16.47% for the trailing three-year period. With about 572 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Equity Index ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
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 $60.56 billion in assets, Vanguard Total Stock Market ETF has $425.61 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.