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Is ALPS O'Shares U.S. Small-Cap Quality Dividend ETF (OUSM) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the ALPS O'Shares U.S. Small-Cap Quality Dividend ETF (OUSM - Free Report) is a smart beta exchange traded fund launched on 12/30/2016.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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
The fund is managed by Alps. OUSM has been able to amass assets over $458.52 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. OUSM seeks to match the performance of the FTSE Russell US Qual / Vol / Yield Factor 3% Capped Index before fees and expenses.
The OShares U.S. Small-Cap Quality Dividend Index is designed to reflect the performance of publicly-listed small-capitalization dividend-paying issuers in the United States exhibiting high quality, low volatility and high dividend yields.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.64%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
OUSM's heaviest allocation is in the Financials sector, which is about 22.40% of the portfolio. Its Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Williams-Sonomainc. (WSM - Free Report) accounts for about 2.57% of the fund's total assets, followed by Marketaxessholdingsinc. (MKTX - Free Report) and Teleflexinc. (TFX - Free Report) .
The top 10 holdings account for about 20.87% of total assets under management.
Performance and Risk
The ETF has added roughly 0.03% so far this year and it's up approximately 13.54% in the last one year (as of 01/22/2024). In the past 52-week period, it has traded between $33.36 and $39.44.
The ETF has a beta of 1.07 and standard deviation of 16.85% for the trailing three-year period. With about 108 holdings, it effectively diversifies company-specific risk.
Alternatives
ALPS O'Shares U.S. Small-Cap Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $62.69 billion in assets, iShares Core S&P Small-Cap ETF has $74.96 billion. IWM has an expense ratio of 0.19% and IJR 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 - Small 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 ALPS O'Shares U.S. Small-Cap Quality Dividend ETF (OUSM) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the ALPS O'Shares U.S. Small-Cap Quality Dividend ETF (OUSM - Free Report) is a smart beta exchange traded fund launched on 12/30/2016.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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
The fund is managed by Alps. OUSM has been able to amass assets over $458.52 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. OUSM seeks to match the performance of the FTSE Russell US Qual / Vol / Yield Factor 3% Capped Index before fees and expenses.
The OShares U.S. Small-Cap Quality Dividend Index is designed to reflect the performance of publicly-listed small-capitalization dividend-paying issuers in the United States exhibiting high quality, low volatility and high dividend yields.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.64%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
OUSM's heaviest allocation is in the Financials sector, which is about 22.40% of the portfolio. Its Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Williams-Sonomainc. (WSM - Free Report) accounts for about 2.57% of the fund's total assets, followed by Marketaxessholdingsinc. (MKTX - Free Report) and Teleflexinc. (TFX - Free Report) .
The top 10 holdings account for about 20.87% of total assets under management.
Performance and Risk
The ETF has added roughly 0.03% so far this year and it's up approximately 13.54% in the last one year (as of 01/22/2024). In the past 52-week period, it has traded between $33.36 and $39.44.
The ETF has a beta of 1.07 and standard deviation of 16.85% for the trailing three-year period. With about 108 holdings, it effectively diversifies company-specific risk.
Alternatives
ALPS O'Shares U.S. Small-Cap Quality Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $62.69 billion in assets, iShares Core S&P Small-Cap ETF has $74.96 billion. IWM has an expense ratio of 0.19% and IJR 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 - Small 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.