Making its debut on 11/24/2015, smart beta exchange traded fund Xtrackers Russell US Multifactor ETF (DEUS) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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 sponsored by Deutsche Bank Ag. It has amassed assets over $291.88 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. DEUS seeks to match the performance of the Russell 1000 Comprehensive Factor Index before fees and expenses.
The Russell 1000 Comprehensive Factor Index provides exposure to domestic equities based on five factors Quality, Value, Momentum, Low Volatility and Size.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.17% for DEUS, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, Mckesson Corp (MCK) accounts for about 1.26% of the fund's total assets, followed by Altria Group Inc (MO) and Cash & Cash Equivalents.
The top 10 holdings account for about 7.18% of total assets under management.
Performance and Risk
So far this year, DEUS return is roughly 13.59%, and was up about 17.04% in the last one year (as of 07/06/2026). During this past 52-week period, the fund has traded between $55.90 and $65.83.
The fund has a beta of 0.87 and standard deviation of 12.99% for the trailing three-year period, which makes DEUS a medium risk choice in this particular space. With about 847 holdings, it effectively diversifies company-specific risk .
Alternatives
Xtrackers Russell US Multifactor 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 $886.26 billion in assets, Vanguard 500 Index Fund ETF Shares has $978.06 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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Xtrackers Russell US Multifactor ETF (DEUS): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).