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 08/16/2019) | Ticker | Sector | Fund Weight |
|---|---|---|---|
| Leidos Holdings Inc | LDOS | Information Technology | 3.94% |
| Teradyne Inc | TER | Information Technology | 2.76% |
| Cypress Semiconductor Corp | CY | Information Technology | 2.41% |
| Eaton Vance Corp | EV | Financials | 2.12% |
| OGE Energy Corp | OGE | Utilities | 2.02% |
| Lazard Ltd | LAZ | Financials | 1.89% |
| Federated Investors Inc | FII | Financials | 1.83% |
| MarketAxess Holdings Inc | MKTX | Financials | 1.83% |
| Toro Co/The | TTC | Industrials | 1.82% |
| Cabot Microelectronics Corp | CCMP | Information Technology | 1.67% |
| Graco Inc | GGG | Industrials | 1.41% |
| National Instruments Corp | NATI | Information Technology | 1.38% |
| Watsco Inc | WSO | Industrials | 1.37% |
| Jack Henry & Associates Inc | JKHY | Information Technology | 1.34% |
| IDEX Corp | IEX | Industrials | 1.30% |
| Cracker Barrel Old Country Sto | CBRL | Consumer Discretionary | 1.26% |
| Williams-Sonoma Inc | WSM | Consumer Discretionary | 1.18% |
| MKS Instruments Inc | MKSI | Information Technology | 1.16% |
| AO Smith Corp | AOS | Industrials | 1.13% |
| Evercore Inc | EVR | Financials | 1.11% |
| First American Financial Corp | FAF | Financials | 1.10% |
| Donaldson Co Inc | DCI | Industrials | 1.09% |
| Hubbell Inc | HUBB | Industrials | 1.09% |
| RPM International Inc | RPM | Materials | 1.04% |
| j2 Global Inc | JCOM | Information Technology | 1.02% |
| Scotts Miracle-Gro Co/The | SMG | Materials | 1.02% |
| Reliance Steel & Aluminum Co | RS | Materials | 0.99% |
| Patterson Cos Inc | PDCO | Health Care | 0.95% |
| Six Flags Entertainment Corp | SIX | Consumer Discretionary | 0.94% |
| Lennox International Inc | LII | Industrials | 0.94% |
| Booz Allen Hamilton Holding Co | BAH | Information Technology | 0.90% |
| Assured Guaranty Ltd | AGO | Financials | 0.87% |
| Moelis & Co | MC | Financials | 0.79% |
| FLIR Systems Inc | FLIR | Information Technology | 0.75% |
| InterDigital Inc | IDCC | Information Technology | 0.73% |
| Dunkin' Brands Group Inc | DNKN | Consumer Discretionary | 0.72% |
| Cohen & Steers Inc | CNS | Financials | 0.71% |
| Artisan Partners Asset Managem | APAM | Financials | 0.70% |
| Allison Transmission Holdings | ALSN | Industrials | 0.68% |
| LPL Financial Holdings Inc | LPLA | Financials | 0.68% |
| FactSet Research Systems Inc | FDS | Financials | 0.67% |
| Pool Corp | POOL | Consumer Discretionary | 0.66% |
| PBF Energy Inc | PBF | Energy | 0.66% |
| NIC Inc | EGOV | Information Technology | 0.65% |
| Flowers Foods Inc | FLO | Consumer Staples | 0.63% |
| Texas Roadhouse Inc | TXRH | Consumer Discretionary | 0.62% |
| WR Grace & Co | GRA | Materials | 0.59% |
| Lancaster Colony Corp | LANC | Consumer Staples | 0.59% |
| IAA Inc | IAA | Industrials | 0.58% |
| MSC Industrial Direct Co Inc | MSM | Industrials | 0.57% |
| LCI Industries | LCII | Consumer Discretionary | 0.56% |
| Progress Software Corp | PRGS | Information Technology | 0.56% |
| Brady Corp | BRC | Industrials | 0.55% |
| Domtar Corp | UFS | Materials | 0.55% |
| Exponent Inc | EXPO | Industrials | 0.54% |
| Louisiana-Pacific Corp | LPX | Materials | 0.54% |
| Carter's Inc | CRI | Consumer Discretionary | 0.54% |
| AptarGroup Inc | ATR | Materials | 0.52% |
| Sabre Corp | SABR | Information Technology | 0.51% |
| Owens Corning | OC | Industrials | 0.51% |
| FirstCash Inc | FCFS | Financials | 0.50% |
| Cogent Communications Holdings | CCOI | Communication Services | 0.50% |
| Thor Industries Inc | THO | Consumer Discretionary | 0.49% |
| RLI Corp | RLI | Financials | 0.49% |
| Waddell & Reed Financial Inc | WDR | Financials | 0.48% |
| Dick's Sporting Goods Inc | DKS | Consumer Discretionary | 0.48% |
| Brinker International Inc | EAT | Consumer Discretionary | 0.48% |
| John Wiley & Sons Inc | JW/A | Communication Services | 0.47% |
| Luminex Corp | LMNX | Health Care | 0.47% |
| ITT Inc | ITT | Industrials | 0.46% |
| Lincoln Electric Holdings Inc | LECO | Industrials | 0.46% |
| UGI Corp | UGI | Utilities | 0.45% |
| Power Integrations Inc | POWI | Information Technology | 0.45% |
| Brooks Automation Inc | BRKS | Information Technology | 0.45% |
| Deluxe Corp | DLX | Industrials | 0.44% |
| J&J Snack Foods Corp | JJSF | Consumer Staples | 0.44% |
| Aqua America Inc | WTR | Utilities | 0.43% |
| Simpson Manufacturing Co Inc | SSD | Industrials | 0.43% |
| Cabot Corp | CBT | Materials | 0.42% |
| Crane Co | CR | Industrials | 0.42% |
| BWX Technologies Inc | BWXT | Industrials | 0.41% |
| Cheesecake Factory Inc/The | CAKE | Consumer Discretionary | 0.41% |
| TEGNA Inc | TGNA | Communication Services | 0.40% |
| Jack in the Box Inc | JACK | Consumer Discretionary | 0.40% |
| Sanderson Farms Inc | SAFM | Consumer Staples | 0.40% |
| American Eagle Outfitters Inc | AEO | Consumer Discretionary | 0.40% |
| IDACORP Inc | IDA | Utilities | 0.39% |
| Portland General Electric Co | POR | Utilities | 0.39% |
| Cinemark Holdings Inc | CNK | Communication Services | 0.38% |
| Sensient Technologies Corp | SXT | Materials | 0.37% |
| Brunswick Corp/DE | BC | Consumer Discretionary | 0.37% |
| Vishay Intertechnology Inc | VSH | Information Technology | 0.36% |
| Dolby Laboratories Inc | DLB | Information Technology | 0.35% |
| Kaiser Aluminum Corp | KALU | Materials | 0.34% |
| KAR Auction Services Inc | KAR | Industrials | 0.34% |
| BGC Partners Inc | BGCP | Financials | 0.34% |
| PacWest Bancorp | PACW | Financials | 0.33% |
| Brightsphere Investment Group | BSIG | Financials | 0.33% |
| NorthWestern Corp | NWE | Utilities | 0.33% |
| Hawaiian Electric Industries I | HE | Utilities | 0.32% |
| ManTech International Corp/VA | MANT | Information Technology | 0.32% |
| Compass Minerals International | CMP | Materials | 0.31% |
| Herman Miller Inc | MLHR | Industrials | 0.31% |
| ALLETE Inc | ALE | Utilities | 0.31% |
| Black Hills Corp | BKH | Utilities | 0.30% |
| KBR Inc | KBR | Information Technology | 0.29% |
| National Fuel Gas Co | NFG | Utilities | 0.29% |
| Meridian Bioscience Inc | VIVO | Health Care | 0.29% |
| Safety Insurance Group Inc | SAFT | Financials | 0.28% |
| Otter Tail Corp | OTTR | Utilities | 0.27% |
| BankUnited Inc | BKU | Financials | 0.27% |
| Mueller Industries Inc | MLI | Industrials | 0.26% |
| New Jersey Resources Corp | NJR | Utilities | 0.26% |
| Steelcase Inc | SCS | Industrials | 0.26% |
| Universal Forest Products Inc | UFPI | Industrials | 0.26% |
| Xperi Corp | XPER | Information Technology | 0.26% |
| Kennametal Inc | KMT | Industrials | 0.25% |
| Tupperware Brands Corp | TUP | Consumer Discretionary | 0.25% |
| ONE Gas Inc | OGS | Utilities | 0.24% |
| ProAssurance Corp | PRA | Financials | 0.24% |
| El Paso Electric Co | EE | Utilities | 0.24% |
| McGrath RentCorp | MGRC | Industrials | 0.24% |
| Macquarie Infrastructure Corp | MIC | Industrials | 0.24% |
| PNM Resources Inc | PNM | Utilities | 0.24% |
| Innospec Inc | IOSP | Materials | 0.23% |
| Choice Hotels International In | CHH | Consumer Discretionary | 0.23% |
| Forward Air Corp | FWRD | Industrials | 0.23% |
| Mercury General Corp | MCY | Financials | 0.23% |
| Extended Stay America Inc | STAY | Consumer Discretionary | 0.22% |
| Designer Brands Inc | DBI | Consumer Discretionary | 0.22% |
| Strategic Education Inc | STRA | Consumer Discretionary | 0.22% |
| Forrester Research Inc | FORR | Industrials | 0.21% |
| American States Water Co | AWR | Utilities | 0.21% |
| Quaker Chemical Corp | KWR | Materials | 0.21% |
| AVX Corp | AVX | Information Technology | 0.21% |
| Columbia Sportswear Co | COLM | Consumer Discretionary | 0.21% |
| La-Z-Boy Inc | LZB | Consumer Discretionary | 0.21% |
| Hillenbrand Inc | HI | Industrials | 0.21% |
| Southwest Gas Holdings Inc | SWX | Utilities | 0.20% |
| Spire Inc | SR | Utilities | 0.20% |
| Morningstar Inc | MORN | Financials | 0.20% |
| Stepan Co | SCL | Materials | 0.19% |
| Badger Meter Inc | BMI | Information Technology | 0.19% |
| Vector Group Ltd | VGR | Consumer Staples | 0.19% |
| Children's Place Inc/The | PLCE | Consumer Discretionary | 0.19% |
| Nu Skin Enterprises Inc | NUS | Consumer Staples | 0.19% |
| Energizer Holdings Inc | ENR | Consumer Staples | 0.19% |
| Walker & Dunlop Inc | WD | Financials | 0.18% |
| Ryder System Inc | R | Industrials | 0.18% |
| Avista Corp | AVA | Utilities | 0.17% |
| Scholastic Corp | SCHL | Communication Services | 0.17% |
| WD-40 Co | WDFC | Consumer Staples | 0.17% |
| MGE Energy Inc | MGEE | Utilities | 0.17% |
| Worthington Industries Inc | WOR | Materials | 0.17% |
| South Jersey Industries Inc | SJI | Utilities | 0.16% |
| CVR Energy Inc | CVI | Energy | 0.16% |
| Papa John's International Inc | PZZA | Consumer Discretionary | 0.16% |
| Big Lots Inc | BIG | Consumer Discretionary | 0.16% |
| Northwest Natural Holding Co | NWN | Utilities | 0.16% |
| Benchmark Electronics Inc | BHE | Information Technology | 0.16% |
| National Presto Industries Inc | NPK | Industrials | 0.16% |
| MDC Holdings Inc | MDC | Consumer Discretionary | 0.16% |
| Werner Enterprises Inc | WERN | Industrials | 0.15% |
| Steven Madden Ltd | SHOO | Consumer Discretionary | 0.15% |
| Bloomin' Brands Inc | BLMN | Consumer Discretionary | 0.15% |
| California Water Service Group | CWT | Utilities | 0.15% |
| Buckle Inc/The | BKE | Consumer Discretionary | 0.14% |
| Gannett Co Inc | GCI | Communication Services | 0.14% |
| Dana Inc | DAN | Consumer Discretionary | 0.13% |
| Oxford Industries Inc | OXM | Consumer Discretionary | 0.13% |
| Bed Bath & Beyond Inc | BBBY | Consumer Discretionary | 0.13% |
| Sturm Ruger & Co Inc | RGR | Consumer Discretionary | 0.13% |
| Capitol Federal Financial Inc | CFFN | Financials | 0.13% |
| Boise Cascade Co | BCC | Materials | 0.12% |
| Granite Construction Inc | GVA | Industrials | 0.12% |
| Ethan Allen Interiors Inc | ETH | Consumer Discretionary | 0.12% |
| Knoll Inc | KNL | Industrials | 0.12% |
| Schnitzer Steel Industries Inc | SCHN | Materials | 0.12% |
| MTS Systems Corp | MTSC | Information Technology | 0.11% |
| Raven Industries Inc | RAVN | Industrials | 0.11% |
| Guess? Inc | GES | Consumer Discretionary | 0.11% |
| Weis Markets Inc | WMK | Consumer Staples | 0.11% |
| Employers Holdings Inc | EIG | Financials | 0.11% |
| RPC Inc | RES | Energy | 0.10% |
| Greif Inc | GEF | Materials | 0.10% |
| Trinseo SA | TSE | Materials | 0.10% |
| Schweitzer-Mauduit Internation | SWM | Materials | 0.10% |
| Tootsie Roll Industries Inc | TR | Consumer Staples | 0.10% |
| Copa Holdings SA | CPA | Industrials | 0.10% |
| International Speedway Corp | ISCA | Consumer Discretionary | 0.09% |
| Signet Jewelers Ltd | SIG | Consumer Discretionary | 0.09% |
| Calavo Growers Inc | CVGW | Consumer Staples | 0.09% |
| HNI Corp | HNI | Industrials | 0.09% |
| Frank's International NV | FI | Energy | 0.09% |
| Ship Finance International Ltd | SFL | Energy | 0.09% |
| Delphi Technologies PLC | DLPH | Consumer Discretionary | 0.09% |
| Inter Parfums Inc | IPAR | Consumer Staples | 0.09% |
| Neenah Inc | NP | Materials | 0.09% |
| Fresh Del Monte Produce Inc | FDP | Consumer Staples | 0.08% |
| ATN International Inc | ATNI | Communication Services | 0.07% |
| Primoris Services Corp | PRIM | Industrials | 0.07% |
| PriceSmart Inc | PSMT | Consumer Staples | 0.07% |
| Medifast Inc | MED | Consumer Staples | 0.07% |
| Nexa Resources SA | NEXA | Materials | 0.07% |
| Lindsay Corp | LNN | Industrials | 0.07% |
| Chico's FAS Inc | CHS | Consumer Discretionary | 0.06% |
| Tredegar Corp | TG | Materials | 0.06% |
| GameStop Corp | GME | Consumer Discretionary | 0.06% |
| Abercrombie & Fitch Co | ANF | Consumer Discretionary | 0.06% |
| New Media Investment Group Inc | NEWM | Communication Services | 0.06% |
| SJW Group | SJW | Utilities | 0.05% |
| Oritani Financial Corp | ORIT | Financials | 0.05% |
| Astec Industries Inc | ASTE | Industrials | 0.05% |
| Interface Inc | TILE | Industrials | 0.04% |
| Tenneco Inc | TEN | Consumer Discretionary | 0.04% |
| Orion Engineered Carbons SA | OEC | Materials | 0.03% |
| Briggs & Stratton Corp | BGG | Industrials | 0.02% |
| US DOLLAR | USD | 0.31% |
Holdings are subject to change and should not be considered investment advice. Past performance does not guarantee future results.
| Quarterly Performance (as of 06/30/2019) | 1 MTH | 3 MTH | 6 MTH | 1 YR | QTD | YTD | SI |
|---|---|---|---|---|---|---|---|
| NAV | 7.73% | 3.92% | 17.24% | 3.65% | 3.92% | 17.24% | 6.20% |
| Market Value | 7.73% | 3.92% | 17.29% | 3.53% | 3.92% | 17.29% | 6.20% |
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 7/31/2019) | 2.25% |
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.