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Is Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
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The Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) was launched on 02/20/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Currency ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $1.58 billion, making it the largest ETF in the Currency ETFs. Before fees and expenses, UUP seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return.
The Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.78% for this ETF, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 0%.
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.
When you look at individual holdings, Nybot Finex United States Dollar Index Future accounts for about 100.02% of the fund's total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and Invesco Treasury Collateral Etf .
The top 10 holdings account for about 199.2% of total assets under management.
Performance and Risk
The ETF has gained about 6.55% and it's up approximately 13.27% so far this year and in the past one year (as of 05/20/2022), respectively. UUP has traded between $24.13 and $28.05 during this last 52-week period.
The fund has a beta of -0.14 and standard deviation of 6.78% for the trailing three-year period, which makes UUP a medium risk choice in this particular space. With about 10 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DB US Dollar Index Bullish ETF is an excellent option for investors seeking to outperform the Currency ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust Global Tactical Commodity Strategy ETF (FTGC - Free Report) tracks N/A and the Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF (PDBC - Free Report) tracks N/A. First Trust Global Tactical Commodity Strategy ETF has $4.79 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF has $9.01 billion. FTGC has an expense ratio of 0.95% and PDBC charges 0.62%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Currency ETFs.
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 Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
The Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) was launched on 02/20/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Currency ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $1.58 billion, making it the largest ETF in the Currency ETFs. Before fees and expenses, UUP seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return.
The Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.78% for this ETF, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 0%.
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.
When you look at individual holdings, Nybot Finex United States Dollar Index Future accounts for about 100.02% of the fund's total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and Invesco Treasury Collateral Etf .
The top 10 holdings account for about 199.2% of total assets under management.
Performance and Risk
The ETF has gained about 6.55% and it's up approximately 13.27% so far this year and in the past one year (as of 05/20/2022), respectively. UUP has traded between $24.13 and $28.05 during this last 52-week period.
The fund has a beta of -0.14 and standard deviation of 6.78% for the trailing three-year period, which makes UUP a medium risk choice in this particular space. With about 10 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DB US Dollar Index Bullish ETF is an excellent option for investors seeking to outperform the Currency ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust Global Tactical Commodity Strategy ETF (FTGC - Free Report) tracks N/A and the Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF (PDBC - Free Report) tracks N/A. First Trust Global Tactical Commodity Strategy ETF has $4.79 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF has $9.01 billion. FTGC has an expense ratio of 0.95% and PDBC charges 0.62%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Currency ETFs.
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.