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Is Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
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Making its debut on 02/20/2007, smart beta exchange traded fund Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) provides investors broad exposure to the Currency ETFs 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
UUP is managed by Invesco, and this fund has amassed over $504.71 million, which makes it the largest ETF in the Currency ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return.
The Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange.
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.
Operating expenses on an annual basis are 0.78% for UUP, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.85%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nybot Finex United States Dollar Index Future-12-18-2023 (DXZ3) accounts for about 99.95% of total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and United States Treasury Bill-11-30-2023.
Its top 10 holdings account for approximately 202.22% of UUP's total assets under management.
Performance and Risk
Year-to-date, the Invesco DB US Dollar Index Bullish ETF has added roughly 4.60% so far, and is up about 3.81% over the last 12 months (as of 12/18/2023). UUP has traded between $27.25 and $30.04 in this past 52-week period.
UUP has a beta of -0.17 and standard deviation of 7.43% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 6 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DB US Dollar Index Bullish ETF is an excellent option for investors seeking to outperform the Currency ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust Global Tactical Commodity Strategy ETF (FTGC - Free Report) tracks N/A and the Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF (PDBC - Free Report) tracks N/A. First Trust Global Tactical Commodity Strategy ETF has $2.57 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $4.98 billion. FTGC has an expense ratio of 0.95% and PDBC charges 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Currency ETFs.
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 Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
Making its debut on 02/20/2007, smart beta exchange traded fund Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) provides investors broad exposure to the Currency ETFs 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
UUP is managed by Invesco, and this fund has amassed over $504.71 million, which makes it the largest ETF in the Currency ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return.
The Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange.
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.
Operating expenses on an annual basis are 0.78% for UUP, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.85%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nybot Finex United States Dollar Index Future-12-18-2023 (DXZ3) accounts for about 99.95% of total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and United States Treasury Bill-11-30-2023.
Its top 10 holdings account for approximately 202.22% of UUP's total assets under management.
Performance and Risk
Year-to-date, the Invesco DB US Dollar Index Bullish ETF has added roughly 4.60% so far, and is up about 3.81% over the last 12 months (as of 12/18/2023). UUP has traded between $27.25 and $30.04 in this past 52-week period.
UUP has a beta of -0.17 and standard deviation of 7.43% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 6 holdings, it has more concentrated exposure than peers.
Alternatives
Invesco DB US Dollar Index Bullish ETF is an excellent option for investors seeking to outperform the Currency ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust Global Tactical Commodity Strategy ETF (FTGC - Free Report) tracks N/A and the Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF (PDBC - Free Report) tracks N/A. First Trust Global Tactical Commodity Strategy ETF has $2.57 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $4.98 billion. FTGC has an expense ratio of 0.95% and PDBC charges 0.59%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Currency ETFs.
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.