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Is SPDR MSCI USA StrategicFactors ETF (QUS) a Strong ETF Right Now?
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Making its debut on 04/15/2015, smart beta exchange traded fund SPDR MSCI USA StrategicFactors ETF (QUS - Free Report) provides investors broad exposure to the Style Box - Large 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $987.82 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. QUS is managed by State Street Global Advisors. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Factor Mix A-Series Index.
The MSCI USA Factor Mix A-Series Index measures the equity market performance of large and mid-cap companies across the U.S. equity market. It aims to represent the performance of a combination of three factors: value, quality, and low volatility.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for QUS are 0.15%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.44%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
QUS's heaviest allocation is in the Information Technology sector, which is about 29.30% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Microsoft Corporation (MSFT - Free Report) accounts for about 3.08% of the fund's total assets, followed by Apple Inc. (AAPL - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Its top 10 holdings account for approximately 20.95% of QUS's total assets under management.
Performance and Risk
So far this year, QUS has added roughly 20.28%, and is up about 34.86% in the last one year (as of 08/04/2021). During this past 52-week period, the fund has traded between $91.47 and $123.17.
The fund has a beta of 0.92 and standard deviation of 22.16% for the trailing three-year period, which makes QUS a medium risk choice in this particular space. With about 625 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI USA StrategicFactors ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $296.79 billion in assets, SPDR S&P 500 ETF has $384.97 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 - Large 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 SPDR MSCI USA StrategicFactors ETF (QUS) a Strong ETF Right Now?
Making its debut on 04/15/2015, smart beta exchange traded fund SPDR MSCI USA StrategicFactors ETF (QUS - Free Report) provides investors broad exposure to the Style Box - Large 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $987.82 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. QUS is managed by State Street Global Advisors. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Factor Mix A-Series Index.
The MSCI USA Factor Mix A-Series Index measures the equity market performance of large and mid-cap companies across the U.S. equity market. It aims to represent the performance of a combination of three factors: value, quality, and low volatility.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for QUS are 0.15%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.44%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
QUS's heaviest allocation is in the Information Technology sector, which is about 29.30% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Microsoft Corporation (MSFT - Free Report) accounts for about 3.08% of the fund's total assets, followed by Apple Inc. (AAPL - Free Report) and Johnson & Johnson (JNJ - Free Report) .
Its top 10 holdings account for approximately 20.95% of QUS's total assets under management.
Performance and Risk
So far this year, QUS has added roughly 20.28%, and is up about 34.86% in the last one year (as of 08/04/2021). During this past 52-week period, the fund has traded between $91.47 and $123.17.
The fund has a beta of 0.92 and standard deviation of 22.16% for the trailing three-year period, which makes QUS a medium risk choice in this particular space. With about 625 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI USA StrategicFactors ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $296.79 billion in assets, SPDR S&P 500 ETF has $384.97 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 - Large 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.