Making its debut on 07/14/2015, smart beta exchange traded fund ALPS (OUSA) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
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.
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 Alps. OUSA has been able to amass assets over $758.74 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. OUSA, before fees and expenses, seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index.
The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.
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 OUSA are 0.48%, which makes it on par with most peer products in the space.
OUSA's 12-month trailing dividend yield is 1.55%.
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.
OUSA's heaviest allocation is in the Financials sector, which is about 29.8% of the portfolio. Its Information Technology and Healthcare round out the top three.
Looking at individual holdings, Johnson & Johnson (JNJ) accounts for about 5.5% of total assets, followed by Alphabet Inc. (GOOGL) and Apple Inc. (AAPL).
The top 10 holdings account for about 42.24% of total assets under management.
Performance and Risk
Year-to-date, the ALPS return is roughly 1.12% so far, and it's up approximately 17.15% over the last 12 months (as of 04/20/2026). OUSA has traded between $49.34 $59.77 in this past 52-week period.
The fund has a beta of 0.80 and standard deviation of 12.73% for the trailing three-year period, which makes OUSA a medium risk choice in this particular space. With about 101 holdings, it effectively diversifies company-specific risk .
Alternatives
ALPS is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $87.27 billion in assets, Vanguard Value Index Fund ETF Shares has $170.44 billion. SCHD has an expense ratio of 0.06% and VTV 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 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.Boost Your Portfolio with Our Top ETF Insights
Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.
Don’t miss out on this valuable resource. It’s free!
Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ALPS (OUSA): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).