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Is ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) a Strong ETF Right Now?
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Launched on 02/03/2015, the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid 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.
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.
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
The fund is managed by Proshares, and has been able to amass over $1.11 billion, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, REGL 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
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 0.40% for REGL, making it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.61%.
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.
This ETF has heaviest allocation in the Financials sector - about 26.70% of the portfolio. Utilities and Industrials round out the top three.
When you look at individual holdings, Royal Gold Inc (RGLD - Free Report) accounts for about 2.70% of the fund's total assets, followed by New Jersey Resources Corp (NJR - Free Report) and One Gas Inc (OGS - Free Report) .
The top 10 holdings account for about 23.29% of total assets under management.
Performance and Risk
The ETF has lost about -0.98% and is up about 1.27% so far this year and in the past one year (as of 05/30/2022), respectively. REGL has traded between $67.75 and $74.12 during this last 52-week period.
REGL has a beta of 0.84 and standard deviation of 25.24% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 49 holdings, it has more concentrated exposure than peers.
Alternatives
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 - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $23.42 billion in assets, Vanguard Dividend Appreciation ETF has $63.81 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.
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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Is ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) a Strong ETF Right Now?
Launched on 02/03/2015, the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid 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.
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.
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
The fund is managed by Proshares, and has been able to amass over $1.11 billion, which makes it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, REGL 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
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 0.40% for REGL, making it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.61%.
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.
This ETF has heaviest allocation in the Financials sector - about 26.70% of the portfolio. Utilities and Industrials round out the top three.
When you look at individual holdings, Royal Gold Inc (RGLD - Free Report) accounts for about 2.70% of the fund's total assets, followed by New Jersey Resources Corp (NJR - Free Report) and One Gas Inc (OGS - Free Report) .
The top 10 holdings account for about 23.29% of total assets under management.
Performance and Risk
The ETF has lost about -0.98% and is up about 1.27% so far this year and in the past one year (as of 05/30/2022), respectively. REGL has traded between $67.75 and $74.12 during this last 52-week period.
REGL has a beta of 0.84 and standard deviation of 25.24% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 49 holdings, it has more concentrated exposure than peers.
Alternatives
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 - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $23.42 billion in assets, Vanguard Dividend Appreciation ETF has $63.81 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.
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.