We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is iShares MSCI USA Equal Weighted ETF (EUSA) a Hot ETF Right Now?
Read MoreHide Full Article
A smart beta exchange traded fund, the iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) debuted on 05/05/2010, and offers broad exposure to the Total Market (U.S.) ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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 managed by Blackrock, and has been able to amass over $202.45 M, which makes it one of the average sized ETFs in the Total Market (U.S.) ETFs. Before fees and expenses, this particular fund seeks to match the performance of the MSCI USA Equal Weighted Index.
The MSCI USA Equal Weighted Index represents the MSCI USA Index, measures the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in the United States.
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 EUSA are 0.15%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 16.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Industrials round out the top three.
When you look at individual holdings, Advanced Micro Devices Inc (AMD - Free Report) accounts for about 0.19% of the fund's total assets, followed by Ulta Beauty Inc (ULTA - Free Report) and Square Inc Class A (SQ - Free Report) .
Its top 10 holdings account for approximately 1.83% of EUSA's total assets under management.
Performance and Risk
EUSA has gained about 8.17% so far this year, and as of 09/20/2018, was up about 15.90% in the last one year. In the past 52-week period, the fund has traded between $52.05 and $59.65.
The fund has a beta of 1.01 and standard deviation of 12.17% for the trailing three-year period, which makes EUSA a medium choice in this particular space. With about 629 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted ETF is a reasonable option for investors seeking to outperform the Total Market (U.S.) ETFs 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 $15.93 B in assets, Vanguard Total Stock Market ETF has $105.79 B. ITOT has an expense ratio of 0.03% and VTI 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 Total Market (U.S.) 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is iShares MSCI USA Equal Weighted ETF (EUSA) a Hot ETF Right Now?
A smart beta exchange traded fund, the iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) debuted on 05/05/2010, and offers broad exposure to the Total Market (U.S.) ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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 managed by Blackrock, and has been able to amass over $202.45 M, which makes it one of the average sized ETFs in the Total Market (U.S.) ETFs. Before fees and expenses, this particular fund seeks to match the performance of the MSCI USA Equal Weighted Index.
The MSCI USA Equal Weighted Index represents the MSCI USA Index, measures the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges in the United States.
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 EUSA are 0.15%, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.50%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 16.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Industrials round out the top three.
When you look at individual holdings, Advanced Micro Devices Inc (AMD - Free Report) accounts for about 0.19% of the fund's total assets, followed by Ulta Beauty Inc (ULTA - Free Report) and Square Inc Class A (SQ - Free Report) .
Its top 10 holdings account for approximately 1.83% of EUSA's total assets under management.
Performance and Risk
EUSA has gained about 8.17% so far this year, and as of 09/20/2018, was up about 15.90% in the last one year. In the past 52-week period, the fund has traded between $52.05 and $59.65.
The fund has a beta of 1.01 and standard deviation of 12.17% for the trailing three-year period, which makes EUSA a medium choice in this particular space. With about 629 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted ETF is a reasonable option for investors seeking to outperform the Total Market (U.S.) ETFs 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 $15.93 B in assets, Vanguard Total Stock Market ETF has $105.79 B. ITOT has an expense ratio of 0.03% and VTI 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 Total Market (U.S.) 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.