The Vident Core U.S. Equity ETF (
VUSE Quick Quote VUSE - Free Report) was launched on 01/22/2014, and is a smart beta exchange traded fund designed to offer 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
Managed by Vident Financial, VUSE has amassed assets over $465.30 million, making it one of the larger ETFs in the Style Box - All Cap Value. This particular fund seeks to match the performance of the Vident Core U.S. Equity Fund Index before fees and expenses.
The Vident Core US Stock 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.48%, making it on par with most peer products in the space.
VUSE's 12-month trailing dividend yield is 1.21%.
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.
Representing 20% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Arcbest Corp (
ARCB Quick Quote ARCB - Free Report) accounts for about 0.74% of the fund's total assets, followed by Herc Hldgs Inc ( HRI Quick Quote HRI - Free Report) and Albertsons Cos Inc ( ACI Quick Quote ACI - Free Report) .
The top 10 holdings account for about 6.68% of total assets under management.
Performance and Risk
The ETF has lost about -4.71% and is up about 16.45% so far this year and in the past one year (as of 02/14/2022), respectively. VUSE has traded between $38.25 and $47.51 during this last 52-week period.
VUSE has a beta of 1.19 and standard deviation of 27.18% 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 Quick Quote DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF ( IUSV Quick Quote IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $6.79 billion in assets, iShares Core S&P U.S. Value ETF has $11.73 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.
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.