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Is ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) a Strong ETF Right Now?
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The ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - 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?
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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Proshares. REGL has been able to amass assets over $1.73 billion, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, REGL 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
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.
Operating expenses on an annual basis are 0.40% for REGL, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.13%.
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.
REGL's heaviest allocation is in the Financials sector, which is about 30.60% of the portfolio. Its Utilities and Industrials round out the top three.
Taking into account individual holdings, Ryder System Inc (R - Free Report) accounts for about 2.28% of the fund's total assets, followed by Lancaster Colony Corp (LANC - Free Report) and Lincoln Electric Holdings (LECO - Free Report) .
REGL's top 10 holdings account for about 19.68% of its total assets under management.
Performance and Risk
The ETF return is roughly 21.36% and was up about 29.97% so far this year and in the past one year (as of 11/27/2024), respectively. REGL has traded between $68.68 and $88.79 during this last 52-week period.
The fund has a beta of 0.83 and standard deviation of 16.60% for the trailing three-year period, which makes REGL a medium risk choice in this particular space. With about 49 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 - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $31.17 billion in assets, Vanguard Dividend Appreciation ETF has $89.06 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
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 ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) a Strong ETF Right Now?
The ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL - 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?
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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Proshares. REGL has been able to amass assets over $1.73 billion, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, REGL 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
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.
Operating expenses on an annual basis are 0.40% for REGL, making it one of the most expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.13%.
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.
REGL's heaviest allocation is in the Financials sector, which is about 30.60% of the portfolio. Its Utilities and Industrials round out the top three.
Taking into account individual holdings, Ryder System Inc (R - Free Report) accounts for about 2.28% of the fund's total assets, followed by Lancaster Colony Corp (LANC - Free Report) and Lincoln Electric Holdings (LECO - Free Report) .
REGL's top 10 holdings account for about 19.68% of its total assets under management.
Performance and Risk
The ETF return is roughly 21.36% and was up about 29.97% so far this year and in the past one year (as of 11/27/2024), respectively. REGL has traded between $68.68 and $88.79 during this last 52-week period.
The fund has a beta of 0.83 and standard deviation of 16.60% for the trailing three-year period, which makes REGL a medium risk choice in this particular space. With about 49 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 - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $31.17 billion in assets, Vanguard Dividend Appreciation ETF has $89.06 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
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.