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Is iShares MSCI USA Equal Weighted ETF (EUSA) a Strong ETF Right Now?
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A smart beta exchange traded fund, the iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) debuted on 05/05/2010, and offers broad exposure to the Style Box - All Cap Blend 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.
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.
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.
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
EUSA is managed by Blackrock, and this fund has amassed over $634.37 million, which makes it one of the larger ETFs in the Style Box - All Cap Blend. EUSA, before fees and expenses, seeks to match the performance of the MSCI USA Equal Weighted Index.
The MSCI USA Equal Weighted Index represents the MSCI USA Index, measures the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges 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.
Operating expenses on an annual basis are 0.09% for EUSA, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.55%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 15.60% of the portfolio. Financials and Industrials round out the top three.
Taking into account individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 0.30% of the fund's total assets, followed by Robinhood Markets Inc Class A (HOOD - Free Report) and Burlington Stores Inc (BURL - Free Report) .
The top 10 holdings account for about 2.14% of total assets under management.
Performance and Risk
The ETF has lost about -1.15% so far this year and is up about 13.09% in the last one year (as of 01/10/2024). In the past 52-week period, it has traded between $70.68 and $84.86.
The ETF has a beta of 1.10 and standard deviation of 18.28% for the trailing three-year period, making it a medium risk choice in the space. With about 615 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $49.18 billion in assets, Vanguard Total Stock Market ETF has $346.14 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 Blend.
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 iShares MSCI USA Equal Weighted ETF (EUSA) a Strong ETF Right Now?
A smart beta exchange traded fund, the iShares MSCI USA Equal Weighted ETF (EUSA - Free Report) debuted on 05/05/2010, and offers broad exposure to the Style Box - All Cap Blend 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.
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.
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.
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
EUSA is managed by Blackrock, and this fund has amassed over $634.37 million, which makes it one of the larger ETFs in the Style Box - All Cap Blend. EUSA, before fees and expenses, seeks to match the performance of the MSCI USA Equal Weighted Index.
The MSCI USA Equal Weighted Index represents the MSCI USA Index, measures the performance of equity securities in the top 85% by market capitalization of equity securities listed on stock exchanges 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.
Operating expenses on an annual basis are 0.09% for EUSA, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.55%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 15.60% of the portfolio. Financials and Industrials round out the top three.
Taking into account individual holdings, Broadcom Inc (AVGO - Free Report) accounts for about 0.30% of the fund's total assets, followed by Robinhood Markets Inc Class A (HOOD - Free Report) and Burlington Stores Inc (BURL - Free Report) .
The top 10 holdings account for about 2.14% of total assets under management.
Performance and Risk
The ETF has lost about -1.15% so far this year and is up about 13.09% in the last one year (as of 01/10/2024). In the past 52-week period, it has traded between $70.68 and $84.86.
The ETF has a beta of 1.10 and standard deviation of 18.28% for the trailing three-year period, making it a medium risk choice in the space. With about 615 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI USA Equal Weighted ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P Total U.S. Stock Market ETF (ITOT - Free Report) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI - Free Report) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $49.18 billion in assets, Vanguard Total Stock Market ETF has $346.14 billion. ITOT has an expense ratio of 0.03% and VTI charges 0.03%.
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 Blend.
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.