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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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 Deutsche Bank Ag, and has been able to amass over $302.36 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund 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
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.
Annual operating expenses for this ETF are 0.17%, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 1.38%.
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.
Taking into account individual holdings, Allstate Corp (ALL) accounts for about 1% of the fund's total assets, followed by Archer-daniels-midland Co (ADM) and Mckesson Corp (MCK).
The top 10 holdings account for about 6.53% of total assets under management.
Performance and Risk
The ETF has added roughly 15.85% and was up about 17.18% so far this year and in the past one year (as of 09/07/2026), respectively. DEUS has traded between $56.19 and $68.35 during this last 52-week period.
The ETF has a beta of 0.86 and standard deviation of 12.95% for the trailing three-year period, making it a medium risk choice in the space. With about 867 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 $884.27 billion in assets, Vanguard 500 Index Fund ETF Shares has $1053.01 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
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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Xtrackers Russell US Multifactor ETF (DEUS): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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