Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the ALPS OShares U.S. Quality Dividend ETF (OUSA) is a smart beta exchange traded fund launched on 07/14/2015.
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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
Managed by Alps, OUSA has amassed assets over $753.74 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.48% for OUSA, making it on par with most peer products in the space.
OUSA's 12-month trailing dividend yield is 1.34%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
OUSA's heaviest allocation is in the Information Technology sector, which is about 22.5% of the portfolio. Its Financials and Healthcare round out the top three.
Looking at individual holdings, Johnson & Johnson (JNJ) accounts for about 5.91% of total assets, followed by Alphabet Inc. (GOOGL) and Apple Inc. (AAPL).
OUSA's top 10 holdings account for about 44.66% of its total assets under management.
Performance and Risk
The ETF return is roughly 8.78% and is up roughly 13.44% so far this year and in the past one year (as of 08/24/2026), respectively. OUSA has traded between $54.65 and $62.35 during this last 52-week period.
The fund has a beta of 0.74 and standard deviation of 11.47% 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 OShares U.S. Quality Dividend ETF 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 Morningstar Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $111.69 billion in assets, Vanguard Morningstar Value ETF has $193.37 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.
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ALPS OShares U.S. Quality Dividend ETF (OUSA): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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