Yahoo Finance Is Franklin U.S. Equity Index ETF (USPX) a Strong ETF Right Now?
Launched on 06/01/2016, the Franklin U.S. Equity Index ETF (USPX) is a smart beta exchange traded fund offering broad exposure to the Style Box - All 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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Franklin Templeton Investments, and has been able to amass over $1.14 billion, which makes it one of the larger ETFs in the Style Box - All Cap Blend. USPX seeks to match the performance of the MORNINGSTAR US TARGET MARKET EXPOSURE ID before fees and expenses.
The Morningstar US Target Market Exposure Index targets large and mid-capitalization U.S. stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization.
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 0.03% for USPX, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.26%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
USPX's heaviest allocation is in the Information Technology sector, which is about 28.40% of the portfolio. Its Financials and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT) accounts for about 6.78% of the fund's total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA).
Its top 10 holdings account for approximately 30.85% of USPX's total assets under management.
Performance and Risk
Year-to-date, the Franklin U.S. Equity Index ETF has added about 14.72% so far, and is up about 26.47% over the last 12 months (as of 06/24/2024). USPX has traded between $35.85 and $47.96 in this past 52-week period.
USPX has a beta of 0.88 and standard deviation of 16.49% for the trailing three-year period. With about 588 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Equity Index ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. IShares Core S&P Total U.S. Stock Market ETF has $56.83 billion in assets, Vanguard Total Stock Market ETF has $407.11 billion. ITOT has an expense ratio of 0.03% and VTI charges 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 - All Cap Blend.
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.
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Franklin U.S. Equity Index ETF (USPX): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Vanguard Total Stock Market ETF (VTI): ETF Research Reports
iShares Core S&P Total U.S. Stock Market ETF (ITOT): ETF Research Reports
