The ProShares S&P MidCap 400 Dividend Aristocrats ETF (
REGL Quick Quote REGL - Free Report) was launched on 02/03/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Value category of the market. What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
The fund is managed by Proshares. REGL has been able to amass assets over $1.09 billion, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the S&P MidCap 400 Dividend Aristocrats Index.
The S&P MidCap 400 Dividend Aristocrats Index targets companies that are currently members of the S&P MidCap 400 Index and have increased dividend payments each year for at least 15 years.
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.
Annual operating expenses for REGL are 0.40%, which makes it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.62%.
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.
This ETF has heaviest allocation in the Financials sector - about 28.40% of the portfolio. Industrials and Utilities round out the top three.
Taking into account individual holdings, Cullen/frost Bankers Inc (
CFR Quick Quote CFR - Free Report) accounts for about 2.36% of the fund's total assets, followed by Factset Research Systems Inc ( FDS Quick Quote FDS - Free Report) and Ryder System Inc ( R Quick Quote R - Free Report) .
Its top 10 holdings account for approximately 22.02% of REGL's total assets under management.
Performance and Risk
Year-to-date, the ProShares S&P MidCap 400 Dividend Aristocrats ETF has lost about -1.17% so far, and was up about 6.59% over the last 12 months (as of 03/28/2022). REGL has traded between $67.75 and $74.76 in this past 52-week period.
REGL has a beta of 0.87 and standard deviation of 24.95% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 54 holdings, it effectively diversifies company-specific risk.
ProShares S&P MidCap 400 Dividend Aristocrats ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Core Dividend Growth ETF (
DGRO Quick Quote DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF ( VIG Quick Quote VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $23.62 billion in assets, Vanguard Dividend Appreciation ETF has $65.75 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 - Mid 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.