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 06/25/2019)	Ticker	Sector	Fund Weight
Leidos Holdings Inc	LDOS	Information Technology	3.68%
Teradyne Inc	TER	Information Technology	2.34%
Cypress Semiconductor Corp	CY	Information Technology	2.30%
Eaton Vance Corp	EV	Financials	2.20%
OGE Energy Corp	OGE	Utilities	2.01%
Lazard Ltd	LAZ	Financials	1.92%
Federated Investors Inc	FII	Financials	1.79%
Toro Co/The	TTC	Industrials	1.69%
MarketAxess Holdings Inc	MKTX	Financials	1.58%
Graco Inc	GGG	Industrials	1.55%
Cabot Microelectronics Corp	CCMP	Information Technology	1.43%
Watsco Inc	WSO	Industrials	1.36%
Patterson Cos Inc	PDCO	Health Care	1.35%
IDEX Corp	IEX	Industrials	1.31%
Cracker Barrel Old Country Sto	CBRL	Consumer Discretionary	1.29%
National Instruments Corp	NATI	Information Technology	1.28%
Jack Henry & Associates Inc	JKHY	Information Technology	1.27%
Evercore Inc	EVR	Financials	1.22%
Williams-Sonoma Inc	WSM	Consumer Discretionary	1.16%
AO Smith Corp	AOS	Industrials	1.11%
MKS Instruments Inc	MKSI	Information Technology	1.11%
Donaldson Co Inc	DCI	Industrials	1.09%
Hubbell Inc	HUBB	Industrials	1.08%
j2 Global Inc	JCOM	Information Technology	1.05%
First American Financial Corp	FAF	Financials	1.04%
Lennox International Inc	LII	Industrials	0.98%
InterDigital Inc	IDCC	Information Technology	0.96%
RPM International Inc	RPM	Materials	0.91%
Reliance Steel & Aluminum Co	RS	Materials	0.90%
Scotts Miracle-Gro Co/The	SMG	Materials	0.89%
FLIR Systems Inc	FLIR	Information Technology	0.84%
PBF Energy Inc	PBF	Energy	0.83%
Moelis & Co	MC	Financials	0.83%
Assured Guaranty Ltd	AGO	Financials	0.82%
Booz Allen Hamilton Holding Co	BAH	Information Technology	0.81%
Six Flags Entertainment Corp	SIX	Consumer Discretionary	0.81%
KAR Auction Services Inc	KAR	Industrials	0.81%
LPL Financial Holdings Inc	LPLA	Financials	0.72%
Allison Transmission Holdings	ALSN	Industrials	0.72%
Domtar Corp	UFS	Materials	0.70%
Artisan Partners Asset Managem	APAM	Financials	0.69%
Dunkin' Brands Group Inc	DNKN	Consumer Discretionary	0.69%
FactSet Research Systems Inc	FDS	Financials	0.69%
WR Grace & Co	GRA	Materials	0.67%
Cohen & Steers Inc	CNS	Financials	0.67%
Texas Roadhouse Inc	TXRH	Consumer Discretionary	0.64%
Flowers Foods Inc	FLO	Consumer Staples	0.64%
Pool Corp	POOL	Consumer Discretionary	0.62%
Thor Industries Inc	THO	Consumer Discretionary	0.61%
MSC Industrial Direct Co Inc	MSM	Industrials	0.59%
Louisiana-Pacific Corp	LPX	Materials	0.59%
Progress Software Corp	PRGS	Information Technology	0.57%
Carter's Inc	CRI	Consumer Discretionary	0.56%
LCI Industries	LCII	Consumer Discretionary	0.56%
Lancaster Colony Corp	LANC	Consumer Staples	0.55%
Brady Corp	BRC	Industrials	0.53%
Brooks Automation Inc	BRKS	Information Technology	0.53%
AptarGroup Inc	ATR	Materials	0.52%
ITT Inc	ITT	Industrials	0.52%
UGI Corp	UGI	Utilities	0.50%
John Wiley & Sons Inc	JW/A	Communication Services	0.50%
NIC Inc	EGOV	Information Technology	0.50%
Dick's Sporting Goods Inc	DKS	Consumer Discretionary	0.50%
Cogent Communications Holdings	CCOI	Communication Services	0.50%
Cabot Corp	CBT	Materials	0.50%
Waddell & Reed Financial Inc	WDR	Financials	0.49%
FirstCash Inc	FCFS	Financials	0.49%
Cheesecake Factory Inc/The	CAKE	Consumer Discretionary	0.48%
Sabre Corp	SABR	Information Technology	0.48%
Brinker International Inc	EAT	Consumer Discretionary	0.47%
Owens Corning	OC	Industrials	0.46%
RLI Corp	RLI	Financials	0.46%
Luminex Corp	LMNX	Health Care	0.46%
Lincoln Electric Holdings Inc	LECO	Industrials	0.45%
Crane Co	CR	Industrials	0.44%
American Eagle Outfitters Inc	AEO	Consumer Discretionary	0.44%
Exponent Inc	EXPO	Industrials	0.43%
Simpson Manufacturing Co Inc	SSD	Industrials	0.43%
BrightSphere Investment Group	BSIG	Financials	0.41%
Sensient Technologies Corp	SXT	Materials	0.41%
Aqua America Inc	WTR	Utilities	0.40%
TEGNA Inc	TGNA	Communication Services	0.39%
Deluxe Corp	DLX	Industrials	0.39%
Power Integrations Inc	POWI	Information Technology	0.38%
Portland General Electric Co	POR	Utilities	0.37%
BWX Technologies Inc	BWXT	Industrials	0.37%
IDACORP Inc	IDA	Utilities	0.37%
Dolby Laboratories Inc	DLB	Information Technology	0.37%
Brunswick Corp/DE	BC	Consumer Discretionary	0.37%
PacWest Bancorp	PACW	Financials	0.37%
Jack in the Box Inc	JACK	Consumer Discretionary	0.37%
Vishay Intertechnology Inc	VSH	Information Technology	0.36%
J&J Snack Foods Corp	JJSF	Consumer Staples	0.36%
Sanderson Farms Inc	SAFM	Consumer Staples	0.36%
Kaiser Aluminum Corp	KALU	Materials	0.35%
Cinemark Holdings Inc	CNK	Communication Services	0.35%
Tupperware Brands Corp	TUP	Consumer Discretionary	0.34%
Compass Minerals International	CMP	Materials	0.33%
NorthWestern Corp	NWE	Utilities	0.33%
National Fuel Gas Co	NFG	Utilities	0.33%
BGC Partners Inc	BGCP	Financials	0.33%
Meridian Bioscience Inc	VIVO	Health Care	0.32%
Black Hills Corp	BKH	Utilities	0.31%
Hawaiian Electric Industries I	HE	Utilities	0.31%
Kennametal Inc	KMT	Industrials	0.30%
ManTech International Corp/VA	MANT	Information Technology	0.30%
ALLETE Inc	ALE	Utilities	0.30%
Forrester Research Inc	FORR	Industrials	0.30%
Hillenbrand Inc	HI	Industrials	0.29%
New Jersey Resources Corp	NJR	Utilities	0.29%
KBR Inc	KBR	Information Technology	0.28%
BankUnited Inc	BKU	Financials	0.28%
Mueller Industries Inc	MLI	Industrials	0.28%
Otter Tail Corp	OTTR	Utilities	0.28%
Safety Insurance Group Inc	SAFT	Financials	0.27%
Designer Brands Inc	DBI	Consumer Discretionary	0.27%
Herman Miller Inc	MLHR	Industrials	0.27%
Steelcase Inc	SCS	Industrials	0.26%
Quaker Chemical Corp	KWR	Materials	0.26%
Mercury General Corp	MCY	Financials	0.26%
Extended Stay America Inc	STAY	Consumer Discretionary	0.25%
Xperi Corp	XPER	Information Technology	0.25%
Macquarie Infrastructure Corp	MIC	Industrials	0.25%
AVX Corp	AVX	Information Technology	0.24%
ONE Gas Inc	OGS	Utilities	0.24%
PNM Resources Inc	PNM	Utilities	0.24%
El Paso Electric Co	EE	Utilities	0.24%
Universal Forest Products Inc	UFPI	Industrials	0.23%
Innospec Inc	IOSP	Materials	0.23%
ProAssurance Corp	PRA	Financials	0.22%
Columbia Sportswear Co	COLM	Consumer Discretionary	0.22%
Choice Hotels International In	CHH	Consumer Discretionary	0.22%
Nu Skin Enterprises Inc	NUS	Consumer Staples	0.22%
McGrath RentCorp	MGRC	Industrials	0.22%
Children's Place Inc/The	PLCE	Consumer Discretionary	0.22%
Forward Air Corp	FWRD	Industrials	0.21%
Strategic Education Inc	STRA	Consumer Discretionary	0.21%
Big Lots Inc	BIG	Consumer Discretionary	0.21%
Badger Meter Inc	BMI	Information Technology	0.21%
Spire Inc	SR	Utilities	0.20%
Ryder System Inc	R	Industrials	0.20%
Southwest Gas Holdings Inc	SWX	Utilities	0.20%
La-Z-Boy Inc	LZB	Consumer Discretionary	0.20%
Bed Bath & Beyond Inc	BBBY	Consumer Discretionary	0.20%
Granite Construction Inc	GVA	Industrials	0.20%
Energizer Holdings Inc	ENR	Consumer Staples	0.19%
CVR Energy Inc	CVI	Energy	0.18%
Stepan Co	SCL	Materials	0.18%
American States Water Co	AWR	Utilities	0.18%
Dana Inc	DAN	Consumer Discretionary	0.18%
Bloomin' Brands Inc	BLMN	Consumer Discretionary	0.18%
Morningstar Inc	MORN	Financials	0.18%
Worthington Industries Inc	WOR	Materials	0.18%
South Jersey Industries Inc	SJI	Utilities	0.17%
National Presto Industries Inc	NPK	Industrials	0.17%
Walker & Dunlop Inc	WD	Financials	0.17%
MGE Energy Inc	MGEE	Utilities	0.17%
Scholastic Corp	SCHL	Communication Services	0.16%
Avista Corp	AVA	Utilities	0.16%
Sturm Ruger & Co Inc	RGR	Consumer Discretionary	0.16%
Steven Madden Ltd	SHOO	Consumer Discretionary	0.16%
Vector Group Ltd	VGR	Consumer Staples	0.16%
Papa John's International Inc	PZZA	Consumer Discretionary	0.16%
Northwest Natural Holding Co	NWN	Utilities	0.15%
Oxford Industries Inc	OXM	Consumer Discretionary	0.14%
WD-40 Co	WDFC	Consumer Staples	0.14%
Werner Enterprises Inc	WERN	Industrials	0.14%
Trinseo SA	TSE	Materials	0.14%
Benchmark Electronics Inc	BHE	Information Technology	0.14%
Ethan Allen Interiors Inc	ETH	Consumer Discretionary	0.14%
Buckle Inc/The	BKE	Consumer Discretionary	0.13%
MDC Holdings Inc	MDC	Consumer Discretionary	0.13%
California Water Service Group	CWT	Utilities	0.13%
Signet Jewelers Ltd	SIG	Consumer Discretionary	0.13%
Capitol Federal Financial Inc	CFFN	Financials	0.12%
Schnitzer Steel Industries Inc	SCHN	Materials	0.12%
RPC Inc	RES	Energy	0.12%
Raven Industries Inc	RAVN	Industrials	0.12%
Gannett Co Inc	GCI	Communication Services	0.11%
Guess? Inc	GES	Consumer Discretionary	0.11%
Knoll Inc	KNL	Industrials	0.11%
Delphi Technologies PLC	DLPH	Consumer Discretionary	0.11%
MTS Systems Corp	MTSC	Information Technology	0.11%
Frank's International NV	FI	Energy	0.11%
Employers Holdings Inc	EIG	Financials	0.11%
Boise Cascade Co	BCC	Materials	0.10%
Greif Inc	GEF	Materials	0.10%
Weis Markets Inc	WMK	Consumer Staples	0.10%
GameStop Corp	GME	Consumer Discretionary	0.10%
HNI Corp	HNI	Industrials	0.10%
Tootsie Roll Industries Inc	TR	Consumer Staples	0.10%
Calavo Growers Inc	CVGW	Consumer Staples	0.09%
International Speedway Corp	ISCA	Consumer Discretionary	0.09%
Schweitzer-Mauduit Internation	SWM	Materials	0.09%
Fresh Del Monte Produce Inc	FDP	Consumer Staples	0.09%
Copa Holdings SA	CPA	Industrials	0.09%
Inter Parfums Inc	IPAR	Consumer Staples	0.09%
Ship Finance International Ltd	SFL	Energy	0.09%
Neenah Inc	NP	Materials	0.08%
Medifast Inc	MED	Consumer Staples	0.08%
Nexa Resources SA	NEXA	Materials	0.08%
ATN International Inc	ATNI	Communication Services	0.08%
Primoris Services Corp	PRIM	Industrials	0.07%
Chico's FAS Inc	CHS	Consumer Discretionary	0.07%
New Media Investment Group Inc	NEWM	Communication Services	0.06%
Lindsay Corp	LNN	Industrials	0.06%
PriceSmart Inc	PSMT	Consumer Staples	0.06%
Abercrombie & Fitch Co	ANF	Consumer Discretionary	0.06%
Interface Inc	TILE	Industrials	0.05%
Tredegar Corp	TG	Materials	0.05%
Orion Engineered Carbons SA	OEC	Materials	0.05%
Astec Industries Inc	ASTE	Industrials	0.05%
Oritani Financial Corp	ORIT	Financials	0.05%
SJW Group	SJW	Utilities	0.05%
Tenneco Inc	TEN	Consumer Discretionary	0.04%
Briggs & Stratton Corp	BGG	Industrials	0.04%
US DOLLAR	USD		0.30%

Holdings subject to change.

Holdings are subject to change and should not be considered investment advice. Past performance does not guarantee future results.

Quarterly Performance (as of 03/31/2019)	1 MTH	3 MTH	6 MTH	1 YR	QTD	YTD	SI
NAV	-1.09%	12.81%	-5.14%	4.70%	12.81%	12.81%	5.10%
Market Value	-1.05%	12.86%	-5.14%	4.71%	12.86%	12.86%	5.10%

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	67110P 100
Target Index Provider	FTSE Russell
Target Index Symbol	FUSRQVY3
IOPV Ticker	OUSM.IV
Expense Ratio	0.48%
30-Day SEC Yield1	2.46%

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.