Launched on 04/15/2015, the State Street SPDR MSCI USA StrategicFactors ETF (QUS) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend 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.
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.
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
Managed by State Street Investment Management, QUS has amassed assets over $1.53 billion, making it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA Factor Mix A-Series Index.
The MSCI USA Factor Mix A-Series Capped Index seeks to measure the equity market performance of large and mid-cap companies across the U.S. equity market.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.29%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 27.7% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL) accounts for about 2.84% of the fund's total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).
Its top 10 holdings account for approximately 20.4% of QUS's total assets under management.
Performance and Risk
So far this year, QUS has added about 7.01%, and it's up approximately 20.37% in the last one year (as of 05/26/2026). During this past 52-week period, the fund has traded between $157.93 and $186.39.
The fund has a beta of 0.84 and standard deviation of 11.65% for the trailing three-year period, which makes QUS a medium risk choice in this particular space. With about 539 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR MSCI USA StrategicFactors ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the Vanguard 500 Index Fund ETF Shares (VOO) tracks S&P 500 Index. iShares Core S&P 500 ETF has $832.72 billion in assets, Vanguard 500 Index Fund ETF Shares has $962.68 billion. IVV has an expense ratio of 0.03% and VOO changes 0.03%.
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 - Large Cap Blend
Bottom Line
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State Street SPDR MSCI USA StrategicFactors ETF (QUS): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).