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Is Oshares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Oshares U.S. Quality Dividend ETF (OUSA - Free Report) debuted on 07/14/2015, and offers broad exposure to the Style Box - Large 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
Managed by Oshares Etfs, OUSA has amassed assets over $810.15 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, OUSA seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.
The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
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.
Annual operating expenses for OUSA are 0.48%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.66%.
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 Healthcare sector - about 22.40% of the portfolio. Information Technology and Consumer Staples round out the top three.
Taking into account individual holdings, Home Depot Inc/the (HD - Free Report) accounts for about 5.46% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 38.91% of total assets under management.
Performance and Risk
The ETF has lost about -4.68% and is up roughly 17.40% so far this year and in the past one year (as of 02/07/2022), respectively. OUSA has traded between $36.96 and $46.65 during this last 52-week period.
The ETF has a beta of 0.87 and standard deviation of 19.84% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
Oshares U.S. Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $57.58 billion in assets, Vanguard Value ETF has $92.22 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 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 Oshares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?
A smart beta exchange traded fund, the Oshares U.S. Quality Dividend ETF (OUSA - Free Report) debuted on 07/14/2015, and offers broad exposure to the Style Box - Large 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
Managed by Oshares Etfs, OUSA has amassed assets over $810.15 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, OUSA seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.
The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
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.
Annual operating expenses for OUSA are 0.48%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.66%.
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 Healthcare sector - about 22.40% of the portfolio. Information Technology and Consumer Staples round out the top three.
Taking into account individual holdings, Home Depot Inc/the (HD - Free Report) accounts for about 5.46% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 38.91% of total assets under management.
Performance and Risk
The ETF has lost about -4.68% and is up roughly 17.40% so far this year and in the past one year (as of 02/07/2022), respectively. OUSA has traded between $36.96 and $46.65 during this last 52-week period.
The ETF has a beta of 0.87 and standard deviation of 19.84% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.
Alternatives
Oshares U.S. Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $57.58 billion in assets, Vanguard Value ETF has $92.22 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 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.