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Is Vident Core U.S. Equity ETF (VUSE) a Strong ETF Right Now?

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Making its debut on 01/22/2014, smart beta exchange traded fund Vident Core U.S. Equity ETF (VUSE - Free Report) provides investors broad exposure to the Style Box - All Cap Value 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

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

VUSE is managed by Vident Financial, and this fund has amassed over $452.73 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the Vident Core U.S. Equity Fund Index.

The Vident Core U.S. Equity Fund Index represents a portfolio of US companies that adhere to higher standards of corporate governance and accounting, as measured by numerous research metrics.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.

VUSE's 12-month trailing dividend yield is 1.03%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

VUSE's heaviest allocation is in the Information Technology sector, which is about 19.60% of the portfolio. Its Consumer Discretionary and Industrials round out the top three.

Looking at individual holdings, Arcbest Corp (ARCB - Free Report) accounts for about 0.74% of total assets, followed by Herc Hldgs Inc (HRI - Free Report) and Albertsons Cos Inc (ACI - Free Report) .

Its top 10 holdings account for approximately 6.68% of VUSE's total assets under management.

Performance and Risk

The ETF has gained about 32.57% so far this year and is up about 33.80% in the last one year (as of 12/14/2021). In the past 52-week period, it has traded between $34.17 and $47.34.

VUSE has a beta of 1.20 and standard deviation of 27.38% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 227 holdings, it effectively diversifies company-specific risk.


Vident Core U.S. Equity ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $6.39 billion in assets, iShares Core S&P U.S. Value ETF has $11.48 billion. DFAT has an expense ratio of 0.34% and IUSV 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 Style Box - All Cap Value.

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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