The SPDR MSCI USA StrategicFactors ETF (QUS – Free Report) made its debut on 04/15/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box – Large Cap Blend 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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
Because the fund has amassed over $1.40 billion, this makes it one of the larger ETFs in the Style Box – Large Cap Blend. QUS is managed by State Street Global Advisors. This particular fund 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 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.
Operating expenses on an annual basis are 0.15% for QUS, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.49%.
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.
Representing 25.10% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL – Free Report) accounts for about 3.25% of the fund’s total assets, followed by Microsoft Corp (MSFT – Free Report) and Meta Platforms Inc Class A (META – Free Report) .
Its top 10 holdings account for approximately 21.28% of QUS’s total assets under management.
Performance and Risk
So far this year, QUS return is roughly 0.25%, and is up about 20.03% in the last one year (as of 01/08/2025). During this past 52-week period, the fund has traded between $132.02 and $163.91.
The ETF has a beta of 0.91 and standard deviation of 15.11% for the trailing three-year period, making it a medium risk choice in the space. With about 594 holdings, it effectively diversifies company-specific risk.
Alternatives
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 – Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY – Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $587.29 billion in assets, SPDR S&P 500 ETF has $628.04 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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
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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