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

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A smart beta exchange traded fund, the Vident Core U.S. Equity ETF (VUSE - Free Report) debuted on 01/22/2014, and offers broad exposure to the Style Box - All Cap Value category of the market.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

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.

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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Managed by Vident Financial, VUSE has amassed assets over $483.43 million, making it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, VUSE seeks to match the performance of the Vident Core U.S. Equity Fund Index.

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

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.50%.

It's 12-month trailing dividend yield comes in at 1.25%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Representing 19.70% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Discretionary and Financials round out the top three.

When you look at individual holdings, United States Stl Corp New (X - Free Report) accounts for about 0.86% of the fund's total assets, followed by Mosaic Co New (MOS - Free Report) and Nucor Corp (NUE - Free Report) .

VUSE's top 10 holdings account for about 6.67% of its total assets under management.

Performance and Risk

So far this year, VUSE has lost about -3.66%, and is up roughly 7.30% in the last one year (as of 04/22/2022). During this past 52-week period, the fund has traded between $41.45 and $47.51.

The fund has a beta of 1.18 and standard deviation of 27.56% for the trailing three-year period, which makes VUSE a medium risk choice in this particular space. With about 231 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 $6.98 billion in assets, iShares Core S&P U.S. Value ETF has $12.23 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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