Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Oshares U.S. Quality Dividend ETF (
OUSA Quick Quote OUSA - Free Report) is a passively managed exchange traded fund launched on 07/14/2015.
The fund is sponsored by Oshares Investments. It has amassed assets over $730.27 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
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 this ETF are 0.48%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.67%.
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 to the Information Technology sector--about 23.80% of the portfolio. Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Microsoft Corp (
MSFT Quick Quote MSFT - Free Report) accounts for about 5.39% of total assets, followed by Home Depot Inc/the ( HD Quick Quote HD - Free Report) and Johnson & Johnson ( JNJ Quick Quote JNJ - Free Report) .
The top 10 holdings account for about 38.08% of total assets under management.
Performance and Risk
OUSA seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index before fees and expenses. The FTSE US Qual / Vol / Yield Factor 5% Capped Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
The ETF has added roughly 17.38% so far this year and was up about 22.21% in the last one year (as of 10/25/2021). In the past 52-week period, it has traded between $34.51 and $44.42.
The ETF has a beta of 0.87 and standard deviation of 20.33% 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.
Oshares U.S. Quality Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, OUSA is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (
IWD Quick Quote IWD - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.66 billion in assets, Vanguard Value ETF has $87.52 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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.