Seeking Out Small-Cap Dividend Payers
By: Jim Woods
July 18, 2018 @ 1:49 pm
This week’s featured fund, the O’Shares FTSE Russell Small Cap Quality Dividend ETF (OUSM), tracks the FTSE USA Small Cap ex Real Estate 2Qual/Vol/Yield 3% Capped Factor Index.
OUSM reweights the index to reflect the performance of publicly listed small-capitalization, dividend-paying issuers in the United States based on three factors: high quality, low volatility and high dividend yield. The quality and low volatility factors are designed to reduce exposure to equities that pay high dividends but experience large price declines, as may occur with some dividend investing strategies.
Kevin O’Leary, chairman of O’Shares ETF Investments, is predicting that the U.S. small cap space presents a tremendous opportunity.
Small caps are significant companies, with most topping $1 billion in market value. As a group, small caps have provided attractive performance, despite O’Leary publicly stating he prefers lower risk levels.
“Most people don’t realize that $1,000 invested in U.S small caps 15 years ago would potentially been worth $3,385 today, compared to only $2,642 for U.S. large caps and now, with a strong U.S. dollar and the potential for reduced regulation to boost the U.S. economy, I have more reasons to own small caps,” O’Leary said in an interview.
There are several other advantages to investing in OUSM. Even though it has just $141.58 million in assets under management, OUSM is quite diversified at 223 holdings. Secondly, due to the nature of small-cap equities, investors may not be familiar or aware of many of OUSM’s holdings and would have to spend the time and energy on research if they wished to invest in them individually. OUSM cuts out all that hassle and conveniently offers exposure to high-quality small-caps in one place.
The fund charges an expense ratio of 0.48%, which is the standard for O’Shares funds. It has a distribution yield of 2.53%.
Year to date, OUSM has moved slowly along with the broader market, returning just 1.48%. OUSM’s one-year return is 9.39%.
Top holdings in the fund are Steris Plc (STE), 3.40%; Bio-Techne Corp. (TECH), 2.31%; Encompass Health Corp. (EHC), 2.31%; Lazard Ltd. (LAZ), 2.26%; and Watsco Inc. (WSO), 1.99%.
OUSM’s sector exposure breakdown is as follows: Industrials, 23.83%; Financials, 17.51%; Consumer Discretionary, 16.66%. Information technology, 13.54%; Health Care, 9.41%; and Utilities, 7.61%.
For investors who are looking for small-cap quality dividend companies with low volatility, consider doing more research on O’Shares FTSE Russell Small Cap Quality Dividend ETF (OUSM).
Read story on Stock Investor
OUSM Fund Page | OUSM Holdings
| Name (As of 10/18/2019) | Ticker | Sector | Fund Weight |
|---|---|---|---|
| Cypress Semiconductor Corp | CY | Information Technology | 2.46% |
| Encompass Health Corp | EHC | Health Care | 2.29% |
| Watsco Inc | WSO | Industrials | 2.02% |
| Cabot Microelectronics Corp | CCMP | Information Technology | 1.85% |
| Monolithic Power Systems Inc | MPWR | Information Technology | 1.80% |
| Eaton Vance Corp | EV | Financials | 1.71% |
| AO Smith Corp | AOS | Industrials | 1.59% |
| Williams-Sonoma Inc | WSM | Consumer Discretionary | 1.54% |
| LogMeIn Inc | LOGM | Information Technology | 1.43% |
| Graco Inc | GGG | Industrials | 1.40% |
| Cracker Barrel Old Country Sto | CBRL | Consumer Discretionary | 1.40% |
| Lazard Ltd | LAZ | Financials | 1.37% |
| MKS Instruments Inc | MKSI | Information Technology | 1.29% |
| Healthcare Services Group Inc | HCSG | Industrials | 1.24% |
| Lincoln Electric Holdings Inc | LECO | Industrials | 1.21% |
| Lennox International Inc | LII | Industrials | 1.17% |
| National Instruments Corp | NATI | Information Technology | 1.17% |
| Jack Henry & Associates Inc | JKHY | Information Technology | 1.16% |
| Toro Co/The | TTC | Industrials | 1.15% |
| Reliance Steel & Aluminum Co | RS | Materials | 1.07% |
| Federated Investors Inc | FII | Financials | 1.07% |
| FactSet Research Systems Inc | FDS | Financials | 1.07% |
| First American Financial Corp | FAF | Financials | 1.06% |
| Progress Software Corp | PRGS | Information Technology | 1.03% |
| Donaldson Co Inc | DCI | Industrials | 1.02% |
| UGI Corp | UGI | Utilities | 0.99% |
| Sonoco Products Co | SON | Materials | 0.98% |
| Janus Henderson Group PLC | JHG | Financials | 0.96% |
| FLIR Systems Inc | FLIR | Information Technology | 0.95% |
| Kulicke & Soffa Industries Inc | KLIC | Information Technology | 0.95% |
| MGIC Investment Corp | MTG | Financials | 0.95% |
| Evercore Inc | EVR | Financials | 0.93% |
| Thor Industries Inc | THO | Consumer Discretionary | 0.84% |
| Carter's Inc | CRI | Consumer Discretionary | 0.84% |
| Patterson Cos Inc | PDCO | Health Care | 0.83% |
| MSC Industrial Direct Co Inc | MSM | Industrials | 0.82% |
| Cogent Communications Holdings | CCOI | Communication Services | 0.79% |
| Texas Roadhouse Inc | TXRH | Consumer Discretionary | 0.77% |
| OGE Energy Corp | OGE | Utilities | 0.77% |
| Huntsman Corp | HUN | Materials | 0.76% |
| Six Flags Entertainment Corp | SIX | Consumer Discretionary | 0.73% |
| Carlisle Cos Inc | CSL | Industrials | 0.73% |
| Louisiana-Pacific Corp | LPX | Materials | 0.67% |
| Dunkin' Brands Group Inc | DNKN | Consumer Discretionary | 0.67% |
| Wyndham Destinations Inc | WYND | Consumer Discretionary | 0.64% |
| NIC Inc | EGOV | Information Technology | 0.64% |
| Power Integrations Inc | POWI | Information Technology | 0.63% |
| RPM International Inc | RPM | Materials | 0.63% |
| Cheesecake Factory Inc/The | CAKE | Consumer Discretionary | 0.62% |
| Valvoline Inc | VVV | Materials | 0.62% |
| Steven Madden Ltd | SHOO | Consumer Discretionary | 0.60% |
| MSA Safety Inc | MSA | Industrials | 0.59% |
| Simpson Manufacturing Co Inc | SSD | Industrials | 0.58% |
| American Eagle Outfitters Inc | AEO | Consumer Discretionary | 0.57% |
| Moelis & Co | MC | Financials | 0.56% |
| Dolby Laboratories Inc | DLB | Information Technology | 0.55% |
| MAXIMUS Inc | MMS | Information Technology | 0.55% |
| nVent Electric PLC | NVT | Industrials | 0.54% |
| LPL Financial Holdings Inc | LPLA | Financials | 0.53% |
| Artisan Partners Asset Managem | APAM | Financials | 0.53% |
| Lancaster Colony Corp | LANC | Consumer Staples | 0.53% |
| Hillenbrand Inc | HI | Industrials | 0.53% |
| KAR Auction Services Inc | KAR | Industrials | 0.53% |
| Dick's Sporting Goods Inc | DKS | Consumer Discretionary | 0.52% |
| Brady Corp | BRC | Industrials | 0.52% |
| PBF Energy Inc | PBF | Energy | 0.51% |
| Brinker International Inc | EAT | Consumer Discretionary | 0.50% |
| Cinemark Holdings Inc | CNK | Communication Services | 0.49% |
| Oshkosh Corp | OSK | Industrials | 0.47% |
| Domtar Corp | UFS | Materials | 0.46% |
| Allison Transmission Holdings | ALSN | Industrials | 0.46% |
| Cabot Corp | CBT | Materials | 0.44% |
| WD-40 Co | WDFC | Consumer Staples | 0.44% |
| Cohen & Steers Inc | CNS | Financials | 0.44% |
| Aqua America Inc | WTR | Utilities | 0.44% |
| Herman Miller Inc | MLHR | Industrials | 0.43% |
| Sabre Corp | SABR | Information Technology | 0.43% |
| Delek US Holdings Inc | DK | Energy | 0.42% |
| ITT Inc | ITT | Industrials | 0.41% |
| ABM Industries Inc | ABM | Industrials | 0.41% |
| IDACORP Inc | IDA | Utilities | 0.39% |
| New Jersey Resources Corp | NJR | Utilities | 0.39% |
| NewMarket Corp | NEU | Materials | 0.38% |
| Insperity Inc | NSP | Industrials | 0.38% |
| ALLETE Inc | ALE | Utilities | 0.36% |
| Hanover Insurance Group Inc/Th | THG | Financials | 0.36% |
| Hawaiian Electric Industries I | HE | Utilities | 0.36% |
| HNI Corp | HNI | Industrials | 0.36% |
| Waddell & Reed Financial Inc | WDR | Financials | 0.35% |
| PacWest Bancorp | PACW | Financials | 0.34% |
| Macquarie Infrastructure Corp | MIC | Industrials | 0.34% |
| BGC Partners Inc | BGCP | Financials | 0.34% |
| Portland General Electric Co | POR | Utilities | 0.34% |
| Olin Corp | OLN | Materials | 0.34% |
| Wendy's Co/The | WEN | Consumer Discretionary | 0.33% |
| Flowers Foods Inc | FLO | Consumer Staples | 0.33% |
| New York Community Bancorp Inc | NYCB | Financials | 0.33% |
| Antero Midstream Corp | AM | Energy | 0.33% |
| ONE Gas Inc | OGS | Utilities | 0.32% |
| Assured Guaranty Ltd | AGO | Financials | 0.32% |
| Crane Co | CR | Industrials | 0.31% |
| John Wiley & Sons Inc | JW/A | Communication Services | 0.31% |
| TCF Financial Corp | TCF | Financials | 0.31% |
| ManTech International Corp/VA | MANT | Information Technology | 0.30% |
| Extended Stay America Inc | STAY | Consumer Discretionary | 0.29% |
| Exponent Inc | EXPO | Industrials | 0.28% |
| Synovus Financial Corp | SNV | Financials | 0.28% |
| Compass Minerals International | CMP | Materials | 0.28% |
| Nu Skin Enterprises Inc | NUS | Consumer Staples | 0.28% |
| Vector Group Ltd | VGR | Consumer Staples | 0.28% |
| FirstCash Inc | FCFS | Financials | 0.27% |
| Kaiser Aluminum Corp | KALU | Materials | 0.27% |
| First Horizon National Corp | FHN | Financials | 0.27% |
| Safety Insurance Group Inc | SAFT | Financials | 0.27% |
| J&J Snack Foods Corp | JJSF | Consumer Staples | 0.26% |
| Children's Place Inc/The | PLCE | Consumer Discretionary | 0.26% |
| National Fuel Gas Co | NFG | Utilities | 0.25% |
| ADTRAN Inc | ADTN | Information Technology | 0.25% |
| Deluxe Corp | DLX | Industrials | 0.25% |
| Bed Bath & Beyond Inc | BBBY | Consumer Discretionary | 0.25% |
| Forrester Research Inc | FORR | Industrials | 0.24% |
| Spectrum Brands Holdings Inc | SPB | Consumer Staples | 0.24% |
| Designer Brands Inc | DBI | Consumer Discretionary | 0.24% |
| Goodyear Tire & Rubber Co/The | GT | Consumer Discretionary | 0.24% |
| Applied Industrial Technologie | AIT | Industrials | 0.23% |
| Universal Corp/VA | UVV | Consumer Staples | 0.23% |
| Spire Inc | SR | Utilities | 0.23% |
| PolyOne Corp | POL | Materials | 0.23% |
| Medifast Inc | MED | Consumer Staples | 0.23% |
| Forward Air Corp | FWRD | Industrials | 0.23% |
| FNB Corp/PA | FNB | Financials | 0.23% |
| Inter Parfums Inc | IPAR | Consumer Staples | 0.22% |
| Columbia Sportswear Co | COLM | Consumer Discretionary | 0.22% |
| AVX Corp | AVX | Information Technology | 0.22% |
| United Bankshares Inc/WV | UBSI | Financials | 0.22% |
| Badger Meter Inc | BMI | Information Technology | 0.22% |
| Telephone & Data Systems Inc | TDS | Communication Services | 0.22% |
| Umpqua Holdings Corp | UMPQ | Financials | 0.22% |
| First Hawaiian Inc | FHB | Financials | 0.21% |
| Brightsphere Investment Group | BSIG | Financials | 0.21% |
| NorthWestern Corp | NWE | Utilities | 0.21% |
| Black Hills Corp | BKH | Utilities | 0.20% |
| Southwest Gas Holdings Inc | SWX | Utilities | 0.20% |
| Franklin Electric Co Inc | FELE | Industrials | 0.20% |
| Neenah Inc | NP | Materials | 0.20% |
| CVR Energy Inc | CVI | Energy | 0.20% |
| Bank of Hawaii Corp | BOH | Financials | 0.19% |
| Walker & Dunlop Inc | WD | Financials | 0.19% |
| Regal Beloit Corp | RBC | Industrials | 0.19% |
| Ryder System Inc | R | Industrials | 0.19% |
| Scholastic Corp | SCHL | Communication Services | 0.19% |
| Cal-Maine Foods Inc | CALM | Consumer Staples | 0.18% |
| Dana Inc | DAN | Consumer Discretionary | 0.18% |
| McGrath RentCorp | MGRC | Industrials | 0.18% |
| Covanta Holding Corp | CVA | Industrials | 0.18% |
| Cathay General Bancorp | CATY | Financials | 0.18% |
| Home BancShares Inc/AR | HOMB | Financials | 0.18% |
| Avista Corp | AVA | Utilities | 0.18% |
| Buckle Inc/The | BKE | Consumer Discretionary | 0.18% |
| PNM Resources Inc | PNM | Utilities | 0.17% |
| Kennametal Inc | KMT | Industrials | 0.17% |
| Otter Tail Corp | OTTR | Utilities | 0.17% |
| CVB Financial Corp | CVBF | Financials | 0.17% |
| Quaker Chemical Corp | KWR | Materials | 0.17% |
| Sensient Technologies Corp | SXT | Materials | 0.17% |
| Jack in the Box Inc | JACK | Consumer Discretionary | 0.16% |
| Oxford Industries Inc | OXM | Consumer Discretionary | 0.16% |
| Innospec Inc | IOSP | Materials | 0.16% |
| HB Fuller Co | FUL | Materials | 0.16% |
| Benchmark Electronics Inc | BHE | Information Technology | 0.16% |
| Schweitzer-Mauduit Internation | SWM | Materials | 0.15% |
| PriceSmart Inc | PSMT | Consumer Staples | 0.15% |
| Raven Industries Inc | RAVN | Industrials | 0.15% |
| Worthington Industries Inc | WOR | Materials | 0.15% |
| Werner Enterprises Inc | WERN | Industrials | 0.15% |
| Korn Ferry | KFY | Industrials | 0.15% |
| Trinseo SA | TSE | Materials | 0.14% |
| Ethan Allen Interiors Inc | ETH | Consumer Discretionary | 0.14% |
| La-Z-Boy Inc | LZB | Consumer Discretionary | 0.14% |
| Cooper Tire & Rubber Co | CTB | Consumer Discretionary | 0.14% |
| First Financial Bancorp | FFBC | Financials | 0.14% |
| El Paso Electric Co | EE | Utilities | 0.13% |
| MGE Energy Inc | MGEE | Utilities | 0.13% |
| Kaman Corp | KAMN | Industrials | 0.13% |
| Schneider National Inc | SNDR | Industrials | 0.13% |
| Pattern Energy Group Inc | PEGI | Utilities | 0.13% |
| Cadence BanCorp | CADE | Financials | 0.13% |
| Penske Automotive Group Inc | PAG | Consumer Discretionary | 0.13% |
| Dine Brands Global Inc | DIN | Consumer Discretionary | 0.12% |
| First Merchants Corp | FRME | Financials | 0.12% |
| International Bancshares Corp | IBOC | Financials | 0.12% |
| Bloomin' Brands Inc | BLMN | Consumer Discretionary | 0.12% |
| Dave & Buster's Entertainment | PLAY | Consumer Discretionary | 0.12% |
| WesBanco Inc | WSBC | Financials | 0.12% |
| Signet Jewelers Ltd | SIG | Consumer Discretionary | 0.12% |
| Great Western Bancorp Inc | GWB | Financials | 0.11% |
| National Presto Industries Inc | NPK | Industrials | 0.11% |
| Comfort Systems USA Inc | FIX | Industrials | 0.11% |
| Mueller Industries Inc | MLI | Industrials | 0.11% |
| Employers Holdings Inc | EIG | Financials | 0.11% |
| EnPro Industries Inc | NPO | Industrials | 0.11% |
| Steelcase Inc | SCS | Industrials | 0.10% |
| Northwest Bancshares Inc | NWBI | Financials | 0.10% |
| Acushnet Holdings Corp | GOLF | Consumer Discretionary | 0.10% |
| Core-Mark Holding Co Inc | CORE | Consumer Discretionary | 0.10% |
| Northwest Natural Holding Co | NWN | Utilities | 0.10% |
| Weis Markets Inc | WMK | Consumer Staples | 0.10% |
| Tupperware Brands Corp | TUP | Consumer Discretionary | 0.10% |
| Calavo Growers Inc | CVGW | Consumer Staples | 0.10% |
| Guess? Inc | GES | Consumer Discretionary | 0.09% |
| Schnitzer Steel Industries Inc | SCHN | Materials | 0.09% |
| Tredegar Corp | TG | Materials | 0.09% |
| Greif Inc | GEF | Materials | 0.09% |
| Provident Financial Services I | PFS | Financials | 0.09% |
| Kelly Services Inc | KELYA | Industrials | 0.09% |
| Boise Cascade Co | BCC | Materials | 0.09% |
| Myers Industries Inc | MYE | Materials | 0.09% |
| B&G Foods Inc | BGS | Consumer Staples | 0.08% |
| Innophos Holdings Inc | IPHS | Materials | 0.08% |
| GameStop Corp | GME | Consumer Discretionary | 0.08% |
| BJ's Restaurants Inc | BJRI | Consumer Discretionary | 0.08% |
| Orion Engineered Carbons SA | OEC | Materials | 0.08% |
| Virtu Financial Inc | VIRT | Financials | 0.08% |
| AZZ Inc | AZZ | Industrials | 0.08% |
| Sandy Spring Bancorp Inc | SASR | Financials | 0.07% |
| City Holding Co | CHCO | Financials | 0.07% |
| S&T Bancorp Inc | STBA | Financials | 0.07% |
| Apogee Enterprises Inc | APOG | Industrials | 0.06% |
| Atlantica Yield plc | AY | Utilities | 0.06% |
| Lindsay Corp | LNN | Industrials | 0.06% |
| Copa Holdings SA | CPA | Industrials | 0.06% |
| Quanex Building Products Corp | NX | Industrials | 0.06% |
| Oritani Financial Corp | ORIT | Financials | 0.05% |
| Tootsie Roll Industries Inc | TR | Consumer Staples | 0.05% |
| TFS Financial Corp | TFSL | Financials | 0.05% |
| Washington Trust Bancorp Inc | WASH | Financials | 0.05% |
| ATN International Inc | ATNI | Communication Services | 0.05% |
| TTEC Holdings Inc | TTEC | Information Technology | 0.05% |
| Stock Yards Bancorp Inc | SYBT | Financials | 0.04% |
| Community Trust Bancorp Inc | CTBI | Financials | 0.04% |
| TrustCo Bank Corp NY | TRST | Financials | 0.04% |
| New Media Investment Group Inc | NEWM | Communication Services | 0.03% |
| RPC Inc | RES | Energy | 0.03% |
| Hawaiian Holdings Inc | HA | Industrials | 0.02% |
| International Speedway Corp | ISCA | Consumer Discretionary | 0.00% |
| US DOLLAR | USD | 0.18% |
Holdings are subject to change and should not be considered investment advice. Past performance does not guarantee future results.
| Quarterly Performance (as of 09/30/2019) | 1 MTH | 3 MTH | 6 MTH | 1 YR | QTD | YTD | SI |
|---|---|---|---|---|---|---|---|
| NAV | 3.07% | 1.99% | 5.99% | 0.54% | 1.99% | 19.57% | 6.37% |
| Market Value | 3.07% | 1.99% | 5.99% | 0.54% | 1.99% | 19.62% | 6.38% |
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized.
Shares of the Funds are not individually redeemable and the owners of Shares may purchase or redeem Shares from each Fund in Creation Units only. The purchase and sale price of individual Shares trading on an Exchange may be below, at or above the most recently calculated NAV for such Shares.
Market Price returns are generally based on market value at 4:00PM Eastern time (when NAV is normally determined), and do not represent the returns you would receive if you traded shares at other times. Fund returns assume that dividends and capital gains distributions have been reinvested in the Fund at NAV.
| Profile | |
|---|---|
| Symbol | OUSM |
| Listing Exchange | NYSE/ARCA |
| Inception Date | 12/30/2016 |
| CUSIP | 67110P100 |
| Target Index Provider | FTSE Russell |
| Target Index Symbol | FUSRQVY3 |
| IOPV Ticker | OUSM.IV |
| Expense Ratio | 0.48% |
| 30-Day SEC Yield1 (as of 09/30/2019) | 2.27% |
1. The 30-day SEC yield is calculated with a standardized formula mandated by the SEC. The formula is based on maximum offering price per share and includes the effect of any fee waivers. Without waivers, yields would be reduced. A fund’s actual distribution rate will differ from the SEC yield and any income distributions from the fund may be higher or lower than the SEC yield.
IOPV = Indicative Optimized Portfolio Value (IOPV) is an estimated fair value based on most recent intraday price of underlying assets.
There are risks involved with investing, including 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 fund may use derivatives which may involve risks different from, or greater than, those associated with more traditional investments. The Fund’s 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 Fund’s purchase of such a company’s securities. See the prospectus for specific risks regarding the Fund.
