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Is Vident U.S. Equity Strategy ETF (VUSE) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Vident U.S. Equity Strategy ETF (VUSE - Free Report) is a smart beta exchange traded fund launched on 01/22/2014.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
VUSE is managed by Vident Financial, and this fund has amassed over $535.91 million, which makes 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 U.S. Quality Index is a rules-based, systematic strategy index comprised of equity securities principally traded in the U.S. market of issuers domiciled in the United States.
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 this ETF are 0.50%, making it on par with most peer products in the space.
VUSE's 12-month trailing dividend yield is 1.40%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For VUSE, it has heaviest allocation in the Information Technology sector --about 25.80% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 2.85% of the fund's total assets, followed by Adobe Systems Incorporated (ADBE - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 23.82% of total assets under management.
Performance and Risk
Year-to-date, the Vident U.S. Equity Strategy ETF has gained about 16.56% so far, and was up about 21.98% over the last 12 months (as of 09/07/2023). VUSE has traded between $37.13 and $49.18 in this past 52-week period.
The fund has a beta of 1.15 and standard deviation of 20.03% for the trailing three-year period, which makes VUSE a medium risk choice in this particular space. With about 130 holdings, it effectively diversifies company-specific risk.
Alternatives
Vident U.S. Equity Strategy ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $8.43 billion in assets, iShares Core S&P U.S. Value ETF has $14.01 billion. DFAT has an expense ratio of 0.28% 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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Is Vident U.S. Equity Strategy ETF (VUSE) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Value category of the market, the Vident U.S. Equity Strategy ETF (VUSE - Free Report) is a smart beta exchange traded fund launched on 01/22/2014.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
VUSE is managed by Vident Financial, and this fund has amassed over $535.91 million, which makes 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 U.S. Quality Index is a rules-based, systematic strategy index comprised of equity securities principally traded in the U.S. market of issuers domiciled in the United States.
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 this ETF are 0.50%, making it on par with most peer products in the space.
VUSE's 12-month trailing dividend yield is 1.40%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For VUSE, it has heaviest allocation in the Information Technology sector --about 25.80% of the portfolio --while Healthcare and Financials round out the top three.
Taking into account individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 2.85% of the fund's total assets, followed by Adobe Systems Incorporated (ADBE - Free Report) and Microsoft Corp (MSFT - Free Report) .
The top 10 holdings account for about 23.82% of total assets under management.
Performance and Risk
Year-to-date, the Vident U.S. Equity Strategy ETF has gained about 16.56% so far, and was up about 21.98% over the last 12 months (as of 09/07/2023). VUSE has traded between $37.13 and $49.18 in this past 52-week period.
The fund has a beta of 1.15 and standard deviation of 20.03% for the trailing three-year period, which makes VUSE a medium risk choice in this particular space. With about 130 holdings, it effectively diversifies company-specific risk.
Alternatives
Vident U.S. Equity Strategy ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $8.43 billion in assets, iShares Core S&P U.S. Value ETF has $14.01 billion. DFAT has an expense ratio of 0.28% 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.