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Is ALPS O'Shares U.S. Quality Dividend ETF (OUSA) a Strong ETF Right Now?
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Making its debut on 07/14/2015, smart beta exchange traded fund ALPS O'Shares U.S. Quality Dividend ETF (OUSA - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $788 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA is managed by Alps. Before fees and expenses, this particular fund 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
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 0.48% for this ETF, which makes it on par with most peer products in the space.
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.
For OUSA, it has heaviest allocation in the Financials sector --about 23.10% of the portfolio --while Healthcare and Information Technology round out the top three.
When you look at individual holdings, Home Depot Inc. (HD - Free Report) accounts for about 5.28% of the fund's total assets, followed by Microsoft Corp. (MSFT - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 36.38% of total assets under management.
Performance and Risk
Year-to-date, the ALPS O'Shares U.S. Quality Dividend ETF has added roughly 0% so far, and is down about -4.26% over the last 12 months (as of 04/24/2023). OUSA has traded between $38.45 and $43.49 in this past 52-week period.
With about 101 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 $50.48 billion in assets, Vanguard Value ETF has $102.39 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?
Making its debut on 07/14/2015, smart beta exchange traded fund ALPS O'Shares U.S. Quality Dividend ETF (OUSA - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $788 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA is managed by Alps. Before fees and expenses, this particular fund 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
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 0.48% for this ETF, which makes it on par with most peer products in the space.
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.
For OUSA, it has heaviest allocation in the Financials sector --about 23.10% of the portfolio --while Healthcare and Information Technology round out the top three.
When you look at individual holdings, Home Depot Inc. (HD - Free Report) accounts for about 5.28% of the fund's total assets, followed by Microsoft Corp. (MSFT - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 36.38% of total assets under management.
Performance and Risk
Year-to-date, the ALPS O'Shares U.S. Quality Dividend ETF has added roughly 0% so far, and is down about -4.26% over the last 12 months (as of 04/24/2023). OUSA has traded between $38.45 and $43.49 in this past 52-week period.
With about 101 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 $50.48 billion in assets, Vanguard Value ETF has $102.39 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.