Should the Oshares US Quality Dividend ETF (OUSA) be on your investment radar?

The Oshares US Quality Dividend ETF (OUSA) was launched on 07/14/2015 and is a passively managed exchange-traded fund designed to provide broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Oshares Etfs. It has amassed over $ 812.12 million in assets, making it one of the mid-sized ETFs attempting to match the Large Cap Value segment of the US stock market.

Why large cap value

Large-cap companies typically have a market cap of over $ 10 billion. They are generally stable companies with predictable cash flows and generally less volatile than small and mid-cap companies.

With below average price-to-earnings and price-to-book ratios, value stocks also have below-average sales growth rates and earnings. In terms of their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are, however, likely to underperform growth stocks in strong bull markets.

Costs

Investors should also pay attention to the expense ratio of an ETF. Lower-cost products will produce better results than higher-cost products, assuming all other metrics remain the same.

This ETF’s annual operating expense is 0.48%, which puts it on par with most peer products in the space.

It has a 12 month rolling dividend yield of 1.59%.

Sector exposure and main titles

It is important to delve into an ETF’s holdings before investing despite the many advantages of these types of funds, such as diversified exposure, which minimizes the risk associated with individual stocks. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has the highest allocation to the healthcare sector – around 22.40% of the portfolio. Information technology and consumer staples complete the first three.

When it comes to individual holdings, Home Depot Inc / the (HD) accounts for around 5.46% of total assets, followed by Microsoft Corp (MSFT) and Johnson & Johnson (JNJ).

The top 10 holdings represent approximately 38.91% of total assets under management.

Return and risk

OUSA seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index before fees and expenses. The OShares US Quality Dividend Index measures the performance of publicly traded large and mid-cap dividend paying issuers in the United States.

The ETF has added around 24.78% so far this year and is up around 24.69% in the last year (as of 12/28/2021). Over the past 52 weeks, it has traded between $ 36.96 and $ 46.54.

The ETF has a beta of 0.87 and a standard deviation of 19.93% for the three-year period, making it a medium risk choice in the space. With around 101 participations, it effectively diversifies the risk specific to the company.

Alternatives

The Oshares US Quality Dividend ETF has a Zacks ETF Rank of 3 (Hold), which is based on the expected return of the asset class, expense ratio and momentum, among other factors. Thus, OUSA is a sufficient option for those looking for exposure to the Style Box – Large Cap Value area of ​​the market. Investors might also consider other ETF options in the space.

The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $ 59.79 billion in assets, Vanguard Value ETF has $ 91.89 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.

Final result

Passively managed ETFs are increasingly popular with institutional and retail investors due to their low cost, transparency, flexibility and tax efficiency. They are great vehicles for long term investors.

To learn more about this and other ETFs, search for products that match your investment goals, and read articles on the latest developments in the ETF investing world, please visit the Zacks ETF Center.

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Oshares US Quality Dividend ETF (OUSA): ETF Research Reports

Microsoft Corporation (MSFT): Free Stock Analysis Report

Johnson & Johnson (JNJ): Free Stock Analysis Report

The Home Depot, Inc. (HD): Free Stock Analysis Report

Vanguard Value ETF (VTV): ETF Research Reports

IShares Russell 1000 Value ETF (IWD): ETF Research Reports

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