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Is Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) debuted on 02/20/2007, and offers broad exposure to the Currency ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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
Managed by Invesco, UUP has amassed assets over $2.07 billion, making it the largest ETF in the Currency ETFs. This particular fund seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.77%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Nybot Finex United States Dollar Index Future-9-19-2022 accounts for about 101.68% of the fund's total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and United States Treasury Bill-9-27-2022.
Its top 10 holdings account for approximately 201.03% of UUP's total assets under management.
Performance and Risk
The ETF has added about 11.63% and is up about 11.72% so far this year and in the past one year (as of 11/29/2022), respectively. UUP has traded between $25.43 and $30.67 during this last 52-week period.
UUP has a beta of -0.15 and standard deviation of 7.90% for the trailing three-year period, which makes the fund a medium risk choice in the 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 $4.04 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF has $7.15 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?
A smart beta exchange traded fund, the Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) debuted on 02/20/2007, and offers broad exposure to the Currency ETFs 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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
Managed by Invesco, UUP has amassed assets over $2.07 billion, making it the largest ETF in the Currency ETFs. This particular fund seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.77%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 0%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Nybot Finex United States Dollar Index Future-9-19-2022 accounts for about 101.68% of the fund's total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and United States Treasury Bill-9-27-2022.
Its top 10 holdings account for approximately 201.03% of UUP's total assets under management.
Performance and Risk
The ETF has added about 11.63% and is up about 11.72% so far this year and in the past one year (as of 11/29/2022), respectively. UUP has traded between $25.43 and $30.67 during this last 52-week period.
UUP has a beta of -0.15 and standard deviation of 7.90% for the trailing three-year period, which makes the fund a medium risk choice in the 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 $4.04 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF has $7.15 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.