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Is iShares MSCI USA Equal Weighted ETF (EUSA) a Strong ETF Right Now?
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Making its debut on 05/05/2010, smart beta exchange traded fund iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) provides investors broad exposure to the Style Box - All Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
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.
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
Managed by Blackrock, EUSA has amassed assets over $991.01 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. EUSA seeks to match the performance of the MSCI USA Equal Weighted Index before fees and expenses.
The MSCI USA Equal Weighted Index represents the MSCI USA Index, measures the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in the United States.
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 0.09% for EUSA, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.37%.
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.
For EUSA, it has heaviest allocation in the Financials sector --about 16.30% of the portfolio --while Industrials and Information Technology round out the top three.
Taking into account individual holdings, Applovin Corp Class A (APP - Free Report) accounts for about 0.31% of the fund's total assets, followed by Ge Vernova Inc (GEV - Free Report) and Microstrategy Inc Class A (MSTR - Free Report) .
EUSA's top 10 holdings account for about 2.57% of its total assets under management.
Performance and Risk
The ETF return is roughly 22.02% so far this year and is up about 32.50% in the last one year (as of 11/26/2024). In the past 52-week period, it has traded between $77.96 and $102.02.
The fund has a beta of 1.08 and standard deviation of 18.12% for the trailing three-year period, which makes EUSA a medium risk choice in this particular space. With about 597 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted 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 $65.43 billion in assets, Vanguard Total Stock Market ETF has $462.83 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 iShares MSCI USA Equal Weighted ETF (EUSA) a Strong ETF Right Now?
Making its debut on 05/05/2010, smart beta exchange traded fund iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) provides investors broad exposure to the Style Box - All Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
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.
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
Managed by Blackrock, EUSA has amassed assets over $991.01 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. EUSA seeks to match the performance of the MSCI USA Equal Weighted Index before fees and expenses.
The MSCI USA Equal Weighted Index represents the MSCI USA Index, measures the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in the United States.
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 0.09% for EUSA, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.37%.
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.
For EUSA, it has heaviest allocation in the Financials sector --about 16.30% of the portfolio --while Industrials and Information Technology round out the top three.
Taking into account individual holdings, Applovin Corp Class A (APP - Free Report) accounts for about 0.31% of the fund's total assets, followed by Ge Vernova Inc (GEV - Free Report) and Microstrategy Inc Class A (MSTR - Free Report) .
EUSA's top 10 holdings account for about 2.57% of its total assets under management.
Performance and Risk
The ETF return is roughly 22.02% so far this year and is up about 32.50% in the last one year (as of 11/26/2024). In the past 52-week period, it has traded between $77.96 and $102.02.
The fund has a beta of 1.08 and standard deviation of 18.12% for the trailing three-year period, which makes EUSA a medium risk choice in this particular space. With about 597 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted 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 $65.43 billion in assets, Vanguard Total Stock Market ETF has $462.83 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.