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Is Vident U.S. Equity Strategy ETF (VUSE) a Strong ETF Right Now?
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The Vident U.S. Equity Strategy ETF (VUSE - Free Report) was launched on 01/22/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
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
The fund is managed by Vident Financial, and has been able to amass over $543.84 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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 1.16%.
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 24.40% of the portfolio --while Financials and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 2.76% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Merck & Co Inc (MRK - Free Report) .
The top 10 holdings account for about 22.57% of total assets under management.
Performance and Risk
The ETF has lost about -1.01% so far this year and is up about 18.81% in the last one year (as of 01/11/2024). In the past 52-week period, it has traded between $42.26 and $51.19.
The ETF has a beta of 1.12 and standard deviation of 19.05% for the trailing three-year period, making it a medium risk choice in the space. With about 125 holdings, it effectively diversifies company-specific risk.
Alternatives
Vident U.S. Equity Strategy ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $9.30 billion in assets, iShares Core S&P U.S. Value ETF has $15.53 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?
The Vident U.S. Equity Strategy ETF (VUSE - Free Report) was launched on 01/22/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
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
The fund is managed by Vident Financial, and has been able to amass over $543.84 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. This particular fund, before fees and expenses, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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 1.16%.
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 24.40% of the portfolio --while Financials and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 2.76% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Merck & Co Inc (MRK - Free Report) .
The top 10 holdings account for about 22.57% of total assets under management.
Performance and Risk
The ETF has lost about -1.01% so far this year and is up about 18.81% in the last one year (as of 01/11/2024). In the past 52-week period, it has traded between $42.26 and $51.19.
The ETF has a beta of 1.12 and standard deviation of 19.05% for the trailing three-year period, making it a medium risk choice in the space. With about 125 holdings, it effectively diversifies company-specific risk.
Alternatives
Vident U.S. Equity Strategy ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $9.30 billion in assets, iShares Core S&P U.S. Value ETF has $15.53 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.