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 01/28/2020) | Ticker | Sector | Fund Weight |
|---|---|---|---|
| Encompass Health Corp | EHC | Health Care | 2.52% |
| Cypress Semiconductor Corp | CY | Information Technology | 2.30% |
| Monolithic Power Systems Inc | MPWR | Information Technology | 2.14% |
| Watsco Inc | WSO | Industrials | 1.96% |
| Cabot Microelectronics Corp | CCMP | Information Technology | 1.86% |
| LogMeIn Inc | LOGM | Information Technology | 1.71% |
| Eaton Vance Corp | EV | Financials | 1.70% |
| Graco Inc | GGG | Industrials | 1.57% |
| Williams-Sonoma Inc | WSM | Consumer Discretionary | 1.56% |
| MKS Instruments Inc | MKSI | Information Technology | 1.45% |
| Lazard Ltd | LAZ | Financials | 1.45% |
| AO Smith Corp | AOS | Industrials | 1.33% |
| Cracker Barrel Old Country Sto | CBRL | Consumer Discretionary | 1.30% |
| Healthcare Services Group Inc | HCSG | Industrials | 1.21% |
| Lincoln Electric Holdings Inc | LECO | Industrials | 1.21% |
| National Instruments Corp | NATI | Information Technology | 1.20% |
| Toro Co/The | TTC | Industrials | 1.19% |
| Reliance Steel & Aluminum Co | RS | Materials | 1.17% |
| Jack Henry & Associates Inc | JKHY | Information Technology | 1.14% |
| Progress Software Corp | PRGS | Information Technology | 1.14% |
| FactSet Research Systems Inc | FDS | Financials | 1.12% |
| Thor Industries Inc | THO | Consumer Discretionary | 1.11% |
| Kulicke & Soffa Industries Inc | KLIC | Information Technology | 1.11% |
| Federated Investors Inc | FII | Financials | 1.09% |
| Patterson Cos Inc | PDCO | Health Care | 1.05% |
| Lennox International Inc | LII | Industrials | 1.04% |
| First American Financial Corp | FAF | Financials | 1.03% |
| Janus Henderson Group PLC | JHG | Financials | 1.01% |
| Donaldson Co Inc | DCI | Industrials | 0.97% |
| Cogent Communications Holdings | CCOI | Communication Services | 0.96% |
| Texas Roadhouse Inc | TXRH | Consumer Discretionary | 0.94% |
| Sonoco Products Co | SON | Materials | 0.93% |
| Carter's Inc | CRI | Consumer Discretionary | 0.91% |
| MGIC Investment Corp | MTG | Financials | 0.91% |
| FLIR Systems Inc | FLIR | Information Technology | 0.91% |
| Evercore Inc | EVR | Financials | 0.83% |
| UGI Corp | UGI | Utilities | 0.83% |
| OGE Energy Corp | OGE | Utilities | 0.77% |
| MSC Industrial Direct Co Inc | MSM | Industrials | 0.76% |
| Carlisle Cos Inc | CSL | Industrials | 0.75% |
| Louisiana-Pacific Corp | LPX | Materials | 0.72% |
| MSA Safety Inc | MSA | Industrials | 0.68% |
| Wyndham Destinations Inc | WYND | Consumer Discretionary | 0.66% |
| NIC Inc | EGOV | Information Technology | 0.66% |
| Huntsman Corp | HUN | Materials | 0.66% |
| Dunkin' Brands Group Inc | DNKN | Consumer Discretionary | 0.65% |
| Simpson Manufacturing Co Inc | SSD | Industrials | 0.65% |
| Power Integrations Inc | POWI | Information Technology | 0.65% |
| Artisan Partners Asset Managem | APAM | Financials | 0.65% |
| Steven Madden Ltd | SHOO | Consumer Discretionary | 0.64% |
| RPM International Inc | RPM | Materials | 0.62% |
| nVent Electric PLC | NVT | Industrials | 0.61% |
| LPL Financial Holdings Inc | LPLA | Financials | 0.61% |
| Cheesecake Factory Inc/The | CAKE | Consumer Discretionary | 0.59% |
| Moelis & Co | MC | Financials | 0.57% |
| Dick's Sporting Goods Inc | DKS | Consumer Discretionary | 0.57% |
| Lancaster Colony Corp | LANC | Consumer Staples | 0.57% |
| Dolby Laboratories Inc | DLB | Information Technology | 0.56% |
| Valvoline Inc | VVV | Materials | 0.56% |
| American Eagle Outfitters Inc | AEO | Consumer Discretionary | 0.52% |
| Brinker International Inc | EAT | Consumer Discretionary | 0.51% |
| Oshkosh Corp | OSK | Industrials | 0.51% |
| Hillenbrand Inc | HI | Industrials | 0.50% |
| Six Flags Entertainment Corp | SIX | Consumer Discretionary | 0.50% |
| Brady Corp | BRC | Industrials | 0.50% |
| MAXIMUS Inc | MMS | Information Technology | 0.50% |
| Cohen & Steers Inc | CNS | Financials | 0.49% |
| Domtar Corp | UFS | Materials | 0.47% |
| ITT Inc | ITT | Industrials | 0.46% |
| Aqua America Inc | WTR | Utilities | 0.46% |
| PBF Energy Inc | PBF | Energy | 0.45% |
| KAR Auction Services Inc | KAR | Industrials | 0.44% |
| Sabre Corp | SABR | Information Technology | 0.43% |
| WD-40 Co | WDFC | Consumer Staples | 0.43% |
| Allison Transmission Holdings | ALSN | Industrials | 0.43% |
| Cinemark Holdings Inc | CNK | Communication Services | 0.41% |
| ABM Industries Inc | ABM | Industrials | 0.40% |
| Cabot Corp | CBT | Materials | 0.40% |
| IDACORP Inc | IDA | Utilities | 0.37% |
| Macquarie Infrastructure Corp | MIC | Industrials | 0.36% |
| New Jersey Resources Corp | NJR | Utilities | 0.36% |
| Herman Miller Inc | MLHR | Industrials | 0.36% |
| Hawaiian Electric Industries I | HE | Utilities | 0.36% |
| NewMarket Corp | NEU | Materials | 0.35% |
| Waddell & Reed Financial Inc | WDR | Financials | 0.34% |
| ManTech International Corp/VA | MANT | Information Technology | 0.34% |
| Hanover Insurance Group Inc/Th | THG | Financials | 0.34% |
| HNI Corp | HNI | Industrials | 0.34% |
| Portland General Electric Co | POR | Utilities | 0.34% |
| TCF Financial Corp | TCF | Financials | 0.33% |
| BGC Partners Inc | BGCP | Financials | 0.33% |
| ALLETE Inc | ALE | Utilities | 0.32% |
| Wendy's Co/The | WEN | Consumer Discretionary | 0.32% |
| PacWest Bancorp | PACW | Financials | 0.31% |
| Insperity Inc | NSP | Industrials | 0.31% |
| Delek US Holdings Inc | DK | Energy | 0.31% |
| Flowers Foods Inc | FLO | Consumer Staples | 0.31% |
| Crane Co | CR | Industrials | 0.31% |
| ONE Gas Inc | OGS | Utilities | 0.31% |
| Assured Guaranty Ltd | AGO | Financials | 0.30% |
| John Wiley & Sons Inc | JW/A | Communication Services | 0.30% |
| Vector Group Ltd | VGR | Consumer Staples | 0.30% |
| Exponent Inc | EXPO | Industrials | 0.30% |
| Bed Bath & Beyond Inc | BBBY | Consumer Discretionary | 0.30% |
| Spectrum Brands Holdings Inc | SPB | Consumer Staples | 0.29% |
| Forrester Research Inc | FORR | Industrials | 0.28% |
| New York Community Bancorp Inc | NYCB | Financials | 0.28% |
| Compass Minerals International | CMP | Materials | 0.28% |
| Synovus Financial Corp | SNV | Financials | 0.27% |
| Olin Corp | OLN | Materials | 0.27% |
| First Horizon National Corp | FHN | Financials | 0.27% |
| Kaiser Aluminum Corp | KALU | Materials | 0.26% |
| AVX Corp | AVX | Information Technology | 0.26% |
| Applied Industrial Technologie | AIT | Industrials | 0.26% |
| Extended Stay America Inc | STAY | Consumer Discretionary | 0.26% |
| Antero Midstream Corp | AM | Energy | 0.25% |
| PolyOne Corp | POL | Materials | 0.24% |
| Safety Insurance Group Inc | SAFT | Financials | 0.24% |
| ADTRAN Inc | ADTN | Information Technology | 0.24% |
| FirstCash Inc | FCFS | Financials | 0.23% |
| Deluxe Corp | DLX | Industrials | 0.23% |
| National Fuel Gas Co | NFG | Utilities | 0.23% |
| Franklin Electric Co Inc | FELE | Industrials | 0.23% |
| Forward Air Corp | FWRD | Industrials | 0.23% |
| Umpqua Holdings Corp | UMPQ | Financials | 0.22% |
| Spire Inc | SR | Utilities | 0.22% |
| Universal Corp/VA | UVV | Consumer Staples | 0.22% |
| Medifast Inc | MED | Consumer Staples | 0.22% |
| Nu Skin Enterprises Inc | NUS | Consumer Staples | 0.21% |
| Inter Parfums Inc | IPAR | Consumer Staples | 0.21% |
| Designer Brands Inc | DBI | Consumer Discretionary | 0.21% |
| FNB Corp/PA | FNB | Financials | 0.21% |
| First Hawaiian Inc | FHB | Financials | 0.21% |
| Badger Meter Inc | BMI | Information Technology | 0.21% |
| Neenah Inc | NP | Materials | 0.20% |
| J&J Snack Foods Corp | JJSF | Consumer Staples | 0.20% |
| Goodyear Tire & Rubber Co/The | GT | Consumer Discretionary | 0.20% |
| Regal Beloit Corp | RBC | Industrials | 0.20% |
| Walker & Dunlop Inc | WD | Financials | 0.20% |
| Children's Place Inc/The | PLCE | Consumer Discretionary | 0.20% |
| Buckle Inc/The | BKE | Consumer Discretionary | 0.20% |
| Black Hills Corp | BKH | Utilities | 0.20% |
| McGrath RentCorp | MGRC | Industrials | 0.20% |
| Bank of Hawaii Corp | BOH | Financials | 0.20% |
| NorthWestern Corp | NWE | Utilities | 0.20% |
| Columbia Sportswear Co | COLM | Consumer Discretionary | 0.19% |
| Telephone & Data Systems Inc | TDS | Communication Services | 0.19% |
| United Bankshares Inc/WV | UBSI | Financials | 0.19% |
| Brightsphere Investment Group | BSIG | Financials | 0.19% |
| Signet Jewelers Ltd | SIG | Consumer Discretionary | 0.19% |
| Kennametal Inc | KMT | Industrials | 0.18% |
| Dana Inc | DAN | Consumer Discretionary | 0.18% |
| Avista Corp | AVA | Utilities | 0.17% |
| Cathay General Bancorp | CATY | Financials | 0.17% |
| Home BancShares Inc/AR | HOMB | Financials | 0.17% |
| Benchmark Electronics Inc | BHE | Information Technology | 0.17% |
| Ryder System Inc | R | Industrials | 0.17% |
| PNM Resources Inc | PNM | Utilities | 0.17% |
| Innospec Inc | IOSP | Materials | 0.17% |
| Quaker Chemical Corp | KWR | Materials | 0.16% |
| Southwest Gas Holdings Inc | SWX | Utilities | 0.16% |
| Korn Ferry | KFY | Industrials | 0.16% |
| Sensient Technologies Corp | SXT | Materials | 0.16% |
| Cal-Maine Foods Inc | CALM | Consumer Staples | 0.16% |
| CVB Financial Corp | CVBF | Financials | 0.16% |
| Covanta Holding Corp | CVA | Industrials | 0.16% |
| Scholastic Corp | SCHL | Communication Services | 0.16% |
| Otter Tail Corp | OTTR | Utilities | 0.15% |
| Oxford Industries Inc | OXM | Consumer Discretionary | 0.15% |
| HB Fuller Co | FUL | Materials | 0.15% |
| Jack in the Box Inc | JACK | Consumer Discretionary | 0.15% |
| Worthington Industries Inc | WOR | Materials | 0.15% |
| CVR Energy Inc | CVI | Energy | 0.15% |
| Werner Enterprises Inc | WERN | Industrials | 0.14% |
| Raven Industries Inc | RAVN | Industrials | 0.14% |
| Dine Brands Global Inc | DIN | Consumer Discretionary | 0.14% |
| Schweitzer-Mauduit Internation | SWM | Materials | 0.14% |
| Kaman Corp | KAMN | Industrials | 0.14% |
| First Financial Bancorp | FFBC | Financials | 0.14% |
| MGE Energy Inc | MGEE | Utilities | 0.13% |
| PriceSmart Inc | PSMT | Consumer Staples | 0.13% |
| Bloomin' Brands Inc | BLMN | Consumer Discretionary | 0.13% |
| Cooper Tire & Rubber Co | CTB | Consumer Discretionary | 0.13% |
| El Paso Electric Co | EE | Utilities | 0.13% |
| Dave & Buster's Entertainment | PLAY | Consumer Discretionary | 0.13% |
| Schneider National Inc | SNDR | Industrials | 0.13% |
| Pattern Energy Group Inc | PEGI | Utilities | 0.12% |
| First Merchants Corp | FRME | Financials | 0.12% |
| Penske Automotive Group Inc | PAG | Consumer Discretionary | 0.12% |
| Ethan Allen Interiors Inc | ETH | Consumer Discretionary | 0.12% |
| La-Z-Boy Inc | LZB | Consumer Discretionary | 0.12% |
| International Bancshares Corp | IBOC | Financials | 0.12% |
| Guess? Inc | GES | Consumer Discretionary | 0.11% |
| Acushnet Holdings Corp | GOLF | Consumer Discretionary | 0.11% |
| Comfort Systems USA Inc | FIX | Industrials | 0.11% |
| National Presto Industries Inc | NPK | Industrials | 0.11% |
| Mueller Industries Inc | MLI | Industrials | 0.11% |
| Cadence BanCorp | CADE | Financials | 0.11% |
| Northwest Natural Holding Co | NWN | Utilities | 0.10% |
| Weis Markets Inc | WMK | Consumer Staples | 0.10% |
| Steelcase Inc | SCS | Industrials | 0.10% |
| Trinseo SA | TSE | Materials | 0.10% |
| Employers Holdings Inc | EIG | Financials | 0.10% |
| WesBanco Inc | WSBC | Financials | 0.10% |
| Greif Inc | GEF | Materials | 0.09% |
| Great Western Bancorp Inc | GWB | Financials | 0.09% |
| Northwest Bancshares Inc | NWBI | Financials | 0.09% |
| Tredegar Corp | TG | Materials | 0.09% |
| EnPro Industries Inc | NPO | Industrials | 0.09% |
| Boise Cascade Co | BCC | Materials | 0.09% |
| BJ's Restaurants Inc | BJRI | Consumer Discretionary | 0.09% |
| Core-Mark Holding Co Inc | CORE | Consumer Discretionary | 0.08% |
| AZZ Inc | AZZ | Industrials | 0.08% |
| Myers Industries Inc | MYE | Materials | 0.08% |
| Calavo Growers Inc | CVGW | Consumer Staples | 0.08% |
| Provident Financial Services I | PFS | Financials | 0.08% |
| B&G Foods Inc | BGS | Consumer Staples | 0.08% |
| Orion Engineered Carbons SA | OEC | Materials | 0.08% |
| Sandy Spring Bancorp Inc | SASR | Financials | 0.07% |
| Schnitzer Steel Industries Inc | SCHN | Materials | 0.07% |
| Innophos Holdings Inc | IPHS | Materials | 0.07% |
| Atlantica Yield plc | AY | Utilities | 0.07% |
| S&T Bancorp Inc | STBA | Financials | 0.07% |
| Kelly Services Inc | KELYA | Industrials | 0.07% |
| Virtu Financial Inc | VIRT | Financials | 0.07% |
| City Holding Co | CHCO | Financials | 0.07% |
| Lindsay Corp | LNN | Industrials | 0.06% |
| Copa Holdings SA | CPA | Industrials | 0.05% |
| GameStop Corp | GME | Consumer Discretionary | 0.05% |
| Apogee Enterprises Inc | APOG | Industrials | 0.05% |
| ATN International Inc | ATNI | Communication Services | 0.05% |
| Quanex Building Products Corp | NX | Industrials | 0.05% |
| TFS Financial Corp | TFSL | Financials | 0.05% |
| Tootsie Roll Industries Inc | TR | Consumer Staples | 0.05% |
| Washington Trust Bancorp Inc | WASH | Financials | 0.04% |
| Stock Yards Bancorp Inc | SYBT | Financials | 0.04% |
| Community Trust Bancorp Inc | CTBI | Financials | 0.04% |
| Tupperware Brands Corp | TUP | Consumer Discretionary | 0.04% |
| TTEC Holdings Inc | TTEC | Information Technology | 0.04% |
| TrustCo Bank Corp NY | TRST | Financials | 0.04% |
| RPC Inc | RES | Energy | 0.04% |
| Gannett Co Inc | GCI | Communication Services | 0.03% |
| Hawaiian Holdings Inc | HA | Industrials | 0.02% |
| US DOLLAR | USD | 0.23% |
Holdings are subject to change and should not be considered investment advice. Past performance does not guarantee future results.
| Quarterly Performance (as of 12/31/2019) | 1 MTH | 3 MTH | 6 MTH | 1 YR | QTD | YTD | SI |
|---|---|---|---|---|---|---|---|
| NAV | 2.26% | 6.74% | 8.86% | 27.62% | 6.74% | 27.62% | 8.15% |
| Market Value | 2.19% | 6.74% | 8.86% | 27.68% | 6.74% | 27.68% | 8.15% |
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 12/31/2019) | 2.29% |
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.