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 Strong ETF Right Now?
Read MoreHide Full Article
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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
Because the fund has amassed over $488.89 million, this makes it one of the average sized ETFs in the Style Box - All Cap Blend. EUSA is managed by Blackrock. EUSA 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.09% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.16%.
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 18.70% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Industrials round out the top three.
Taking into account individual holdings, Analog Devices Inc (ADI - Free Report) accounts for about 0.33% of the fund's total assets, followed by Realty Income Reit Corp (O - Free Report) and Tesla Inc (TSLA - Free Report) .
The top 10 holdings account for about 2.61% of total assets under management.
Performance and Risk
So far this year, EUSA has added about 22.92%, and it's up approximately 22.83% in the last one year (as of 12/07/2021). During this past 52-week period, the fund has traded between $70.46 and $90.84.
The fund has a beta of 1.11 and standard deviation of 23.72% for the trailing three-year period, which makes EUSA a medium risk 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 Style Box - All Cap Blend 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 $44.64 billion in assets, Vanguard Total Stock Market ETF has $279.43 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.
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 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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
Because the fund has amassed over $488.89 million, this makes it one of the average sized ETFs in the Style Box - All Cap Blend. EUSA is managed by Blackrock. EUSA 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.09% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.16%.
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 18.70% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Industrials round out the top three.
Taking into account individual holdings, Analog Devices Inc (ADI - Free Report) accounts for about 0.33% of the fund's total assets, followed by Realty Income Reit Corp (O - Free Report) and Tesla Inc (TSLA - Free Report) .
The top 10 holdings account for about 2.61% of total assets under management.
Performance and Risk
So far this year, EUSA has added about 22.92%, and it's up approximately 22.83% in the last one year (as of 12/07/2021). During this past 52-week period, the fund has traded between $70.46 and $90.84.
The fund has a beta of 1.11 and standard deviation of 23.72% for the trailing three-year period, which makes EUSA a medium risk 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 Style Box - All Cap Blend 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 $44.64 billion in assets, Vanguard Total Stock Market ETF has $279.43 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.