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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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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
The fund is managed by Wisdomtree. USMF has been able to amass assets over $367.72 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. Before fees and expenses, USMF 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain 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.
It's 12-month trailing dividend yield comes in at 1.20%.
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 USMF, it has heaviest allocation in the Information Technology sector --about 31.40% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Verisign Inc (VRSN - Free Report) accounts for about 1.77% of total assets, followed by International Business Machines Corp (IBM - Free Report) and Motorola Solutions Inc (MSI - Free Report) .
Its top 10 holdings account for approximately 13.87% of USMF's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Multifactor ETF has added roughly 2.01% so far, and was up about 16.96% over the last 12 months (as of 02/24/2025). USMF has traded between $43.93 and $52.86 in this past 52-week period.
The fund has a beta of 0.91 and standard deviation of 14.28% for the trailing three-year period. With about 199 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 $65.84 billion in assets, Vanguard Total Stock Market ETF has $470.69 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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
The fund is managed by Wisdomtree. USMF has been able to amass assets over $367.72 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. Before fees and expenses, USMF 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain 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.
It's 12-month trailing dividend yield comes in at 1.20%.
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 USMF, it has heaviest allocation in the Information Technology sector --about 31.40% of the portfolio --while Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Verisign Inc (VRSN - Free Report) accounts for about 1.77% of total assets, followed by International Business Machines Corp (IBM - Free Report) and Motorola Solutions Inc (MSI - Free Report) .
Its top 10 holdings account for approximately 13.87% of USMF's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Multifactor ETF has added roughly 2.01% so far, and was up about 16.96% over the last 12 months (as of 02/24/2025). USMF has traded between $43.93 and $52.86 in this past 52-week period.
The fund has a beta of 0.91 and standard deviation of 14.28% for the trailing three-year period. With about 199 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 $65.84 billion in assets, Vanguard Total Stock Market ETF has $470.69 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.