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Is Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?
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Designed to provide broad exposure to the Currency ETFs category of the market, the Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) is a smart beta exchange traded fund launched on 02/20/2007.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 sponsored by Invesco. It has amassed assets over $375.87 million, making 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.
Annual operating expenses for UUP are 0.78%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.22%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, Nybot Finex United States Dollar Index Future-03-18-2024 (DXH4) accounts for about 98.95% of the fund's total assets, followed by United States Treasury Bill-05-30-2024 and Invesco Government & Agency Portfolio (AGPXX).
UUP's top 10 holdings account for about 190.44% of its total assets under management.
Performance and Risk
The ETF has added about 3.54% so far this year and is up about 6.07% in the last one year (as of 02/21/2024). In the past 52-week period, it has traded between $26.95 and $30.04.
The ETF has a beta of -0.20 and standard deviation of 7.43% for the trailing three-year period, making it 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 $2.22 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $4.44 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?
Designed to provide broad exposure to the Currency ETFs category of the market, the Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) is a smart beta exchange traded fund launched on 02/20/2007.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 sponsored by Invesco. It has amassed assets over $375.87 million, making 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.
Annual operating expenses for UUP are 0.78%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.22%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, Nybot Finex United States Dollar Index Future-03-18-2024 (DXH4) accounts for about 98.95% of the fund's total assets, followed by United States Treasury Bill-05-30-2024 and Invesco Government & Agency Portfolio (AGPXX).
UUP's top 10 holdings account for about 190.44% of its total assets under management.
Performance and Risk
The ETF has added about 3.54% so far this year and is up about 6.07% in the last one year (as of 02/21/2024). In the past 52-week period, it has traded between $26.95 and $30.04.
The ETF has a beta of -0.20 and standard deviation of 7.43% for the trailing three-year period, making it 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 $2.22 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $4.44 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.