The ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL Quick QuoteREGL - Free Report) was launched on 02/03/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Value category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $1.48 billion, this makes it one of the average sized ETFs in the Style Box - Mid Cap Value. REGL is managed by Proshares. Before fees and expenses, this particular fund seeks to match the performance of the S&P MidCap 400 Dividend Aristocrats Index.

The S&P MidCap 400 Dividend Aristocrats Index targets companies that are currently members of the S&P MidCap 400 Index and have increased dividend payments each year for at least 15 years.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Annual operating expenses for REGL are 0.40%, which makes it one of the more expensive products in the space.

It's 12-month trailing dividend yield comes in at 2.47%.

Performance and Risk

So far this year, REGL has lost about -2.79%, and is down about -1.54% in the last one year (as of 01/17/2024). During this past 52-week period, the fund has traded between $63.72 and $76.42.

REGL has a beta of 0.85 and standard deviation of 16.63% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 47 holdings, it has more concentrated exposure than peers.

Alternatives

ProShares S&P MidCap 400 Dividend Aristocrats ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Core Dividend Growth ETF (DGRO Quick QuoteDGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG Quick QuoteVIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $25 billion in assets, Vanguard Dividend Appreciation ETF has $73.95 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.

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 - Mid Cap Value.

Bottom Line

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