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Is iShares MSCI USA Equal Weighted ETF (EUSA) a Strong ETF Right Now?
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Making its debut on 05/05/2010, smart beta exchange traded fund iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) provides investors broad exposure to the Style Box - All 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $283.69 million, this makes it one of the average sized ETFs in the Style Box - All Cap Blend. EUSA is managed by Blackrock. This particular fund seeks to match the performance of the MSCI USA Equal Weighted Index before fees and expenses.
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
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 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 1.46%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 19.40% of the portfolio. Healthcare and Financials round out the top three.
When you look at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 0.26% of the fund's total assets, followed by Roku Inc Class A (ROKU - Free Report) and Tesla Inc (TSLA - Free Report) .
The top 10 holdings account for about 2.43% of total assets under management.
Performance and Risk
The ETF has added roughly 1.07% and it's up approximately 13.54% so far this year and in the past one year (as of 02/01/2021), respectively. EUSA has traded between $40.33 and $75.05 during this last 52-week period.
EUSA has a beta of 1.14 and standard deviation of 23.93% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 626 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
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 $32.25 billion in assets, Vanguard Total Stock Market ETF has $201.24 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 - All 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 iShares MSCI USA Equal Weighted ETF (EUSA) a Strong ETF Right Now?
Making its debut on 05/05/2010, smart beta exchange traded fund iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) provides investors broad exposure to the Style Box - All 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $283.69 million, this makes it one of the average sized ETFs in the Style Box - All Cap Blend. EUSA is managed by Blackrock. This particular fund seeks to match the performance of the MSCI USA Equal Weighted Index before fees and expenses.
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
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 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 1.46%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 19.40% of the portfolio. Healthcare and Financials round out the top three.
When you look at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 0.26% of the fund's total assets, followed by Roku Inc Class A (ROKU - Free Report) and Tesla Inc (TSLA - Free Report) .
The top 10 holdings account for about 2.43% of total assets under management.
Performance and Risk
The ETF has added roughly 1.07% and it's up approximately 13.54% so far this year and in the past one year (as of 02/01/2021), respectively. EUSA has traded between $40.33 and $75.05 during this last 52-week period.
EUSA has a beta of 1.14 and standard deviation of 23.93% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 626 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
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 $32.25 billion in assets, Vanguard Total Stock Market ETF has $201.24 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 - All 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.