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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?
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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
The fund is managed by Invesco, and has been able to amass over $397.30 million, which makes it the largest ETF in the Currency ETFs. Before fees and expenses, UUP 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
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 this ETF are 0.78%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.06%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nybot Finex United States Dollar Index Future-06-17-2024 (DXM4) accounts for about 99.90% of 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 200.15% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco DB US Dollar Index Bullish ETF has added roughly 6.28% so far, and is up about 10.04% over the last 12 months (as of 04/24/2024). UUP has traded between $26.95 and $30.04 in this past 52-week period.
UUP has a beta of -0.20 and standard deviation of 7.40% for the trailing three-year period, which makes the fund 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 $2.41 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $5.03 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?
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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
The fund is managed by Invesco, and has been able to amass over $397.30 million, which makes it the largest ETF in the Currency ETFs. Before fees and expenses, UUP 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
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 this ETF are 0.78%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 6.06%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nybot Finex United States Dollar Index Future-06-17-2024 (DXM4) accounts for about 99.90% of 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 200.15% of its total assets under management.
Performance and Risk
Year-to-date, the Invesco DB US Dollar Index Bullish ETF has added roughly 6.28% so far, and is up about 10.04% over the last 12 months (as of 04/24/2024). UUP has traded between $26.95 and $30.04 in this past 52-week period.
UUP has a beta of -0.20 and standard deviation of 7.40% for the trailing three-year period, which makes the fund 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 $2.41 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K-1 ETF has $5.03 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.