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Is ALPS O'Shares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?
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Launched on 07/14/2015, the ALPS O'Shares U.S. Quality Dividend ETF (OUSA - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large 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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $687.08 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA is managed by Alps. This particular fund, before fees and expenses, seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.
The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.48%.
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.
OUSA's heaviest allocation is in the Healthcare sector, which is about 23.10% of the portfolio. Its Information Technology and Financials round out the top three.
When you look at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 5.84% of the fund's total assets, followed by Procter & Gamble Co. (PG - Free Report) and Verizon Communications Inc. (VZ - Free Report) .
OUSA's top 10 holdings account for about 40.03% of its total assets under management.
Performance and Risk
Year-to-date, the ALPS O'Shares U.S. Quality Dividend ETF has lost about -16.44% so far, and is down about -4.26% over the last 12 months (as of 10/17/2022). OUSA has traded between $38.45 and $46.65 in this past 52-week period.
With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
ALPS O'Shares U.S. Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $48.17 billion in assets, Vanguard Value ETF has $91.54 billion. IWD has an expense ratio of 0.18% and VTV 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 - Large 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 ALPS O'Shares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?
Launched on 07/14/2015, the ALPS O'Shares U.S. Quality Dividend ETF (OUSA - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large 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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $687.08 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA is managed by Alps. This particular fund, before fees and expenses, seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.
The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.48%.
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.
OUSA's heaviest allocation is in the Healthcare sector, which is about 23.10% of the portfolio. Its Information Technology and Financials round out the top three.
When you look at individual holdings, Johnson & Johnson (JNJ - Free Report) accounts for about 5.84% of the fund's total assets, followed by Procter & Gamble Co. (PG - Free Report) and Verizon Communications Inc. (VZ - Free Report) .
OUSA's top 10 holdings account for about 40.03% of its total assets under management.
Performance and Risk
Year-to-date, the ALPS O'Shares U.S. Quality Dividend ETF has lost about -16.44% so far, and is down about -4.26% over the last 12 months (as of 10/17/2022). OUSA has traded between $38.45 and $46.65 in this past 52-week period.
With about 100 holdings, it effectively diversifies company-specific risk.
Alternatives
ALPS O'Shares U.S. Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $48.17 billion in assets, Vanguard Value ETF has $91.54 billion. IWD has an expense ratio of 0.18% and VTV 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 - Large 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.