A Steady Dividend ETF From O’Shares

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A Steady Dividend ETF From O’Shares

Todd Shriber, ETF Professor , Benzinga Staff Writer
November 26, 2018 3:14pm

Weakness in the FAANG stocks and other growth and momentum names has some market observers opining about a rotation to value stocks, a group that has achieved laggard status in recent years.

Some evidence suggests that a rotation to value may be warranted. This month, the S&P 500 Value Index is up nearly 1 percent while the S&P 500 is lower by nearly the same amount.

What Happened

Investors focusing on a possible resurgence by value stocks may be missing out on opportunities with quality and dividend stocks such as those featured in the O’Shares FTSE U.S. Quality Dividend ETF OUSA.

OUSA, which is up 1.55 percent this month, tracks the FTSE USA Qual/Vol/Yield 5% Capped Factor Index.

OUSA’s underlying benchmark “is designed to measure the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States that meet certain market capitalization, liquidity, high quality, low volatility and dividend yield thresholds,” according to O’Shares.

Why It’s Important

Some single factor strategies like low volatility lack the ability to capture all of the upside in bull markets, but offer downside protection when stocks swoon. OUSA captured most of the market’s upside while harnessing just 64 percent of the downside, while the S&P 500 Value Index had a downside capture of nearly 100 percent, according to O’Shares data.

OUSA has relatively light exposure to some of the sectors that dominate value strategies. For example, the fund devotes about 18 percent of its combined weight to the troubled energy and financial services sectors. The ETF allocates about a quarter of its weight to the consumer discretionary and technology sectors, groups that are hallmarks of growth strategies.

Still, OUSA offers defensive positioning, as highlighted by a combined weight of over 31 percent to the consumer staples and health care sectors.

What’s Next

Over the past year, OUSA has outperformed the S&P 500 Value Index with lower volatility. OUSA’s trailing 12-month dividend yield of 3.08 percent is also higher than that of the S&P 500 Value Index.

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For current standard performance of the Fund, please visit OUSA Fund Page.

OUSA Fund Page | OUSA Holdings

Name (as of 04/18/2019)	Ticker	Sector	Fund Weight
Cisco Systems	CSCO	Technology	5.05%
Exxon Mobil Corporation	XOM	Energy	4.96%
Johnson & Johnson	JNJ	Health Care	4.81%
Procter & Gamble	PG	Consumer Goods	4.54%
Intel Corp	INTC	Technology	3.88%
Home Depot	HD	Consumer Services	3.17%
Chevron	CVX	Energy	2.88%
Pfizer	PFE	Health Care	2.42%
Philip Morris International	PM	Consumer Goods	2.30%
Pepsico	PEP	Consumer Goods	2.23%
AT&T	T	Telecommunications	2.14%
Merck & Co	MRK	Health Care	2.08%
Texas Instruments	TXN	Technology	2.05%
Verizon Communications	VZ	Telecommunications	2.02%
Boeing	BA	Industrials	1.94%
International Bus Machns.	IBM	Technology	1.90%
Starbucks	SBUX	Consumer Services	1.72%
Altria Group	MO	Consumer Goods	1.62%
Simon Property Group	SPG	Financials	1.61%
McDonalds Corp	MCD	Consumer Services	1.58%
3M Company	MMM	Industrials	1.52%
Coca-Cola	KO	Consumer Goods	1.51%
Marsh & Mclennan	MMC	Financials	1.48%
Walmart	WMT	Consumer Services	1.47%
Public Storage	PSA	Financials	1.45%
Disney (Walt) Company	DIS	Consumer Services	1.29%
Accenture Cl A	ACN	Industrials	1.09%
Lockheed Martin Corp	LMT	Industrials	1.06%
Amgen Corp	AMGN	Health Care	1.03%
Lilly (Eli) & Co	LLY	Health Care	0.99%
Prologis	PLD	Financials	0.94%
Honeywell International Incorporatio	HON	Industrials	0.89%
Colgate-Palmolive	CL	Consumer Goods	0.88%
Union Pacific Corp	UNP	Industrials	0.88%
AbbVie Inc	ABBV	Health Care	0.85%
Price (T. Rowe) Group	TROW	Financials	0.81%
Bristol Myers Squibb	BMY	Health Care	0.78%
Medtronic plc	MDT	Health Care	0.77%
Automatic Data Process	ADP	Industrials	0.77%
NextEra Energy Inc	NEE	Utilities	0.71%
United Technologies	UTX	Industrials	0.64%
Duke Energy Corp	DUK	Utilities	0.64%
Lowes Cos Inc	LOW	Consumer Services	0.62%
Kimberly-Clark	KMB	Consumer Goods	0.60%
Southern Co	SO	Utilities	0.59%
TJX Companies	TJX	Consumer Services	0.59%
General Dynamics Corp	GD	Industrials	0.54%
Avalonbay Communities	AVB	Financials	0.54%
Illinois Tool Wks	ITW	Industrials	0.53%
Occidental Petroleum	OXY	Energy	0.53%
Paychex	PAYX	Industrials	0.50%
Walgreens Boots Alliance	WBA	Consumer Services	0.47%
Emerson Electric	EMR	Industrials	0.47%
Dominion Energy	D	Utilities	0.45%
Waste Mgmt Inc	WM	Industrials	0.45%
Raytheon	RTN	Industrials	0.44%
Linde plc	LIN	Basic Materials	0.43%
CVS Health Corporation	CVS	Consumer Services	0.43%
Schlumberger	SLB	Energy	0.41%
CASHUSD	CASHUSD	Cash	0.40%
Cons Edison Holding	ED	Utilities	0.40%
Exelon Corporation	EXC	Utilities	0.39%
American Elec Power Com	AEP	Utilities	0.39%
Target Corp	TGT	Consumer Services	0.36%
Xilinx	XLNX	Technology	0.36%
Cummins	CMI	Industrials	0.33%
Sempra Energy	SRE	Utilities	0.32%
Franklin Resources	BEN	Financials	0.31%
Air Products And Chemcom	APD	Basic Materials	0.30%
LyondellBasell Industries Cl A	LYB	Basic Materials	0.30%
Phillips 66	PSX	Energy	0.29%
Extra Space Storage	EXR	Financials	0.29%
Sysco Corp	SYY	Consumer Services	0.29%
Public Svc Enterprise Group	PEG	Utilities	0.28%
Eaton Corp PLC	ETN	Industrials	0.28%
XCEL Energy	XEL	Utilities	0.27%
MSCI	MSCI	Financials	0.27%
VF Corp	VFC	Consumer Goods	0.25%
DTE Energy	DTE	Utilities	0.24%
TE Connectivity	TEL	Industrials	0.23%
WEC Energy Group	WEC	Utilities	0.23%
Hershey Company	HSY	Consumer Goods	0.23%
Maxim Integrated Prod.	MXIM	Technology	0.22%
Carnival Corp A	CCL	Consumer Services	0.22%
Edison International	EIX	Utilities	0.22%
Fastenal Co	FAST	Industrials	0.22%
Yum Brands	YUM	Consumer Services	0.22%
Arthur J Gallagher	AJG	Financials	0.22%
FNF Group	FNF	Financials	0.21%
Host Hotels & Resorts	HST	Financials	0.21%
PPL Corporation	PPL	Utilities	0.20%
Clorox	CLX	Consumer Goods	0.20%
Kla-Tencor Corp	KLAC	Technology	0.20%
Ingersoll-Rand	IR	Industrials	0.20%
Paccar	PCAR	Industrials	0.20%
Rockwell Automation	ROK	Industrials	0.20%
Omnicom Group	OMC	Consumer Services	0.19%
Eversource Energy	ES	Utilities	0.19%
Darden Restaurants	DRI	Consumer Services	0.18%
Ameren Corp	AEE	Utilities	0.17%
Entergy Corp	ETR	Utilities	0.17%
Evergy	EVRG	Utilities	0.16%
Parker-Hannifin	PH	Industrials	0.15%
Firstenergy Corp.	FE	Utilities	0.15%
American Water Works Company	AWK	Utilities	0.13%
CenterPoint Energy	CNP	Utilities	0.13%
Federal Realty Invs	FRT	Financials	0.13%
CMS Energy Corp	CMS	Utilities	0.13%
Liberty Property Trust	LPT	Financials	0.12%
Garmin Ltd	GRMN	Consumer Goods	0.12%
Kellogg	K	Consumer Goods	0.12%
Amdocs	DOX	Technology	0.11%
Republic Services	RSG	Industrials	0.11%
Hormel Foods	HRL	Consumer Goods	0.11%
Pinnacle West Capital Corp	PNW	Utilities	0.11%
Hasbro	HAS	Consumer Goods	0.10%
J M Smucker	SJM	Consumer Goods	0.10%
Alliant Energy	LNT	Utilities	0.10%
Cardinal Health	CAH	Health Care	0.10%
Expeditors Intl Washington	EXPD	Industrials	0.09%
ConAgra Brands Inc	CAG	Consumer Goods	0.09%
Campbell Soup	CPB	Consumer Goods	0.09%
Interpublic Group Cos	IPG	Consumer Services	0.08%
Coca-Cola European Partners	CCEP	Consumer Goods	0.08%
Intl Flavours & Fragrances	IFF	Basic Materials	0.07%
Snap-On Inc	SNA	Industrials	0.07%
Molson Coors CL B	TAP	Consumer Goods	0.06%
Leggett & Platt	LEG	Consumer Goods	0.06%
Packaging Corp of America	PKG	Industrials	0.06%
Ingredion	INGR	Consumer Goods	0.05%
Autoliv	ALV	Consumer Goods	0.05%
Bunge	BG	Consumer Goods	0.05%
Gentex Corp	GNTX	Consumer Goods	0.04%
Block (H & R) NPV	HRB	Consumer Services	0.03%
MDU Resources	MDU	Industrials	0.03%
Avangrid	AGR	Utilities	0.03%
Resideo Technologies	REZI	Industrials	0.02%
Southern Copper Corp.	SCCO	Basic Materials	0.02%

Holdings subject to change.

Before you invest in O’Shares ETF Investments Funds, please refer to the prospectus for important information about the investment objectives, risks, charges and expenses. To obtain a prospectus containing this and other important information, please visit www.oshares.com to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing including the possible loss of principal.

Concentration in a particular industry or sector will subject the Funds to loss due to adverse occurrences that may affect that industry or sector. The Funds may use derivatives which may involve risks different from, or greater than, those associated with more traditional investments. The Funds’ emphasis on dividend-paying stocks involves the risk that such stocks may fall out of favor with investors and underperform the market. Also, a company may reduce or eliminate its dividend after the Funds’ purchase of such a company's securities. Returns on investments in foreign securities could be more volatile than, or trail the returns on, investments in U.S. securities. Exposures to foreign securities entail special risks, including political, diplomatic, economic, foreign market and trading risks. In addition, the Funds’ investments in securities denominated in other currencies could decline due to changes in local currency relative to the value of the U.S. dollar, which may affect the Funds’ returns. See the prospectus for specific risks regarding the Funds.
The securities of small capitalization companies are often more volatile and less liquid than the stocks of larger companies and may be more affected than other types of securities during market downturns. Compared to larger companies, small capitalization companies may have a shorter history of operations, and may have limited product lines, markets or financial resources.
Companies involved with the Internet, technology and e-commerce are exposed to risks associated with rapid advances in technology, obsolescence of current products and services, the finite life of patents and the constant threat of global competition and substitutes.
Past performance does not guarantee future results. Shares are bought and sold at market price (not NAV), are not individually redeemable, and owners of Shares may acquire those Shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, consisting of 50,000 Shares. Brokerage commissions will reduce returns. The market price of Shares can be at, below, or above NAV. Brokerage commissions will reduce returns. Market Price returns are based upon the midpoint of the bid/ask spread at 4:00 PM Eastern time (when NAV is normally determined), and do not represent the returns you would receive if you traded Shares at other times.

O’Shares ETF Investments Funds are distributed by Foreside Fund Services, LLC. Foreside Fund Services, LLC is not affiliated with O’Shares ETF Investments or any of its affiliates.