Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the SPDR MSCI USA StrategicFactors ETF (NYSE:QUS), a passively managed exchange traded fund launched on 04/15/2015.
The fund is sponsored by State Street (NYSE:STT) Global Advisors. It has amassed assets over $1.05 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.38%.
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.
This ETF has heaviest allocation to the Information Technology sector--about 31.30% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Microsoft Corporation (NASDAQ:MSFT) accounts for about 3.52% of total assets, followed by Apple Inc. (NASDAQ:AAPL) and Johnson & Johnson (JNJ).
The top 10 holdings account for about 21.24% of total assets under management.
Performance and Risk
QUS seeks to match the performance of the MSCI USA Factor Mix A-Series Index before fees and expenses. The MSCI USA Factor Mix A-Series Index measures the equity market performance of large and mid-cap companies across the U.S. equity market. It aims to represent the performance of a combination of three factors: value, quality, and low volatility.
The ETF return is roughly 25.76% so far this year and was up about 26.14% in the last one year (as of 12/13/2021). In the past 52-week period, it has traded between $102.56 and $129.10.
The ETF has a beta of 0.92 and standard deviation of 21.79% for the trailing three-year period, making it a medium risk choice in the space. With about 621 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI USA StrategicFactors ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QUS is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $331.58 billion in assets, SPDR S&P 500 ETF has $432.64 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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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SPDR MSCI USA StrategicFactors ETF (QUS): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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