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 12/05/2019) | Ticker | Sector | Fund Weight |
|---|---|---|---|
| Cypress Semiconductor Corp | CY | Information Technology | 2.37% |
| Encompass Health Corp | EHC | Health Care | 2.36% |
| Watsco Inc | WSO | Industrials | 2.02% |
| Monolithic Power Systems Inc | MPWR | Information Technology | 1.98% |
| Eaton Vance Corp | EV | Financials | 1.76% |
| Cabot Microelectronics Corp | CCMP | Information Technology | 1.56% |
| LogMeIn Inc | LOGM | Information Technology | 1.50% |
| Williams-Sonoma Inc | WSM | Consumer Discretionary | 1.46% |
| Graco Inc | GGG | Industrials | 1.42% |
| AO Smith Corp | AOS | Industrials | 1.41% |
| MKS Instruments Inc | MKSI | Information Technology | 1.40% |
| Lazard Ltd | LAZ | Financials | 1.36% |
| Cracker Barrel Old Country Sto | CBRL | Consumer Discretionary | 1.30% |
| Reliance Steel & Aluminum Co | RS | Materials | 1.23% |
| Lincoln Electric Holdings Inc | LECO | Industrials | 1.22% |
| Healthcare Services Group Inc | HCSG | Industrials | 1.19% |
| Toro Co/The | TTC | Industrials | 1.17% |
| Jack Henry & Associates Inc | JKHY | Information Technology | 1.17% |
| Lennox International Inc | LII | Industrials | 1.17% |
| National Instruments Corp | NATI | Information Technology | 1.14% |
| Federated Investors Inc | FII | Financials | 1.10% |
| FactSet Research Systems Inc | FDS | Financials | 1.09% |
| First American Financial Corp | FAF | Financials | 1.09% |
| Patterson Cos Inc | PDCO | Health Care | 1.06% |
| Progress Software Corp | PRGS | Information Technology | 1.04% |
| Donaldson Co Inc | DCI | Industrials | 1.03% |
| Janus Henderson Group PLC | JHG | Financials | 1.03% |
| Kulicke & Soffa Industries Inc | KLIC | Information Technology | 1.02% |
| Sonoco Products Co | SON | Materials | 0.98% |
| MGIC Investment Corp | MTG | Financials | 0.96% |
| FLIR Systems Inc | FLIR | Information Technology | 0.92% |
| Thor Industries Inc | THO | Consumer Discretionary | 0.91% |
| Evercore Inc | EVR | Financials | 0.88% |
| Carter's Inc | CRI | Consumer Discretionary | 0.87% |
| Texas Roadhouse Inc | TXRH | Consumer Discretionary | 0.86% |
| UGI Corp | UGI | Utilities | 0.85% |
| Cogent Communications Holdings | CCOI | Communication Services | 0.83% |
| MSC Industrial Direct Co Inc | MSM | Industrials | 0.79% |
| Carlisle Cos Inc | CSL | Industrials | 0.77% |
| OGE Energy Corp | OGE | Utilities | 0.74% |
| Huntsman Corp | HUN | Materials | 0.70% |
| Louisiana-Pacific Corp | LPX | Materials | 0.69% |
| Steven Madden Ltd | SHOO | Consumer Discretionary | 0.68% |
| NIC Inc | EGOV | Information Technology | 0.67% |
| Cheesecake Factory Inc/The | CAKE | Consumer Discretionary | 0.66% |
| Wyndham Destinations Inc | WYND | Consumer Discretionary | 0.65% |
| Dunkin' Brands Group Inc | DNKN | Consumer Discretionary | 0.65% |
| RPM International Inc | RPM | Materials | 0.64% |
| MSA Safety Inc | MSA | Industrials | 0.63% |
| Simpson Manufacturing Co Inc | SSD | Industrials | 0.63% |
| Valvoline Inc | VVV | Materials | 0.62% |
| LPL Financial Holdings Inc | LPLA | Financials | 0.61% |
| nVent Electric PLC | NVT | Industrials | 0.60% |
| Six Flags Entertainment Corp | SIX | Consumer Discretionary | 0.60% |
| Power Integrations Inc | POWI | Information Technology | 0.60% |
| Artisan Partners Asset Managem | APAM | Financials | 0.59% |
| Dick's Sporting Goods Inc | DKS | Consumer Discretionary | 0.58% |
| Lancaster Colony Corp | LANC | Consumer Staples | 0.57% |
| Dolby Laboratories Inc | DLB | Information Technology | 0.55% |
| Moelis & Co | MC | Financials | 0.55% |
| American Eagle Outfitters Inc | AEO | Consumer Discretionary | 0.55% |
| Hillenbrand Inc | HI | Industrials | 0.55% |
| Oshkosh Corp | OSK | Industrials | 0.52% |
| PBF Energy Inc | PBF | Energy | 0.52% |
| Brady Corp | BRC | Industrials | 0.52% |
| MAXIMUS Inc | MMS | Information Technology | 0.51% |
| Brinker International Inc | EAT | Consumer Discretionary | 0.51% |
| Domtar Corp | UFS | Materials | 0.49% |
| ITT Inc | ITT | Industrials | 0.47% |
| Allison Transmission Holdings | ALSN | Industrials | 0.46% |
| Cabot Corp | CBT | Materials | 0.46% |
| Cohen & Steers Inc | CNS | Financials | 0.46% |
| WD-40 Co | WDFC | Consumer Staples | 0.46% |
| Sabre Corp | SABR | Information Technology | 0.44% |
| Cinemark Holdings Inc | CNK | Communication Services | 0.44% |
| Herman Miller Inc | MLHR | Industrials | 0.43% |
| KAR Auction Services Inc | KAR | Industrials | 0.43% |
| Aqua America Inc | WTR | Utilities | 0.41% |
| ABM Industries Inc | ABM | Industrials | 0.40% |
| NewMarket Corp | NEU | Materials | 0.39% |
| New Jersey Resources Corp | NJR | Utilities | 0.37% |
| HNI Corp | HNI | Industrials | 0.36% |
| Delek US Holdings Inc | DK | Energy | 0.36% |
| IDACORP Inc | IDA | Utilities | 0.36% |
| Waddell & Reed Financial Inc | WDR | Financials | 0.36% |
| Macquarie Infrastructure Corp | MIC | Industrials | 0.36% |
| TCF Financial Corp | TCF | Financials | 0.34% |
| Hanover Insurance Group Inc/Th | THG | Financials | 0.34% |
| Hawaiian Electric Industries I | HE | Utilities | 0.34% |
| PacWest Bancorp | PACW | Financials | 0.34% |
| BGC Partners Inc | BGCP | Financials | 0.33% |
| Assured Guaranty Ltd | AGO | Financials | 0.33% |
| ManTech International Corp/VA | MANT | Information Technology | 0.33% |
| John Wiley & Sons Inc | JW/A | Communication Services | 0.33% |
| Flowers Foods Inc | FLO | Consumer Staples | 0.32% |
| Wendy's Co/The | WEN | Consumer Discretionary | 0.32% |
| ALLETE Inc | ALE | Utilities | 0.32% |
| Portland General Electric Co | POR | Utilities | 0.32% |
| Vector Group Ltd | VGR | Consumer Staples | 0.32% |
| Crane Co | CR | Industrials | 0.31% |
| Spectrum Brands Holdings Inc | SPB | Consumer Staples | 0.30% |
| Olin Corp | OLN | Materials | 0.30% |
| Synovus Financial Corp | SNV | Financials | 0.29% |
| Kaiser Aluminum Corp | KALU | Materials | 0.29% |
| ONE Gas Inc | OGS | Utilities | 0.29% |
| New York Community Bancorp Inc | NYCB | Financials | 0.29% |
| Extended Stay America Inc | STAY | Consumer Discretionary | 0.28% |
| Insperity Inc | NSP | Industrials | 0.27% |
| Bed Bath & Beyond Inc | BBBY | Consumer Discretionary | 0.27% |
| Forrester Research Inc | FORR | Industrials | 0.27% |
| Exponent Inc | EXPO | Industrials | 0.27% |
| Compass Minerals International | CMP | Materials | 0.27% |
| AVX Corp | AVX | Information Technology | 0.27% |
| First Horizon National Corp | FHN | Financials | 0.27% |
| Applied Industrial Technologie | AIT | Industrials | 0.26% |
| Deluxe Corp | DLX | Industrials | 0.25% |
| National Fuel Gas Co | NFG | Utilities | 0.25% |
| Safety Insurance Group Inc | SAFT | Financials | 0.25% |
| Goodyear Tire & Rubber Co/The | GT | Consumer Discretionary | 0.24% |
| J&J Snack Foods Corp | JJSF | Consumer Staples | 0.24% |
| Nu Skin Enterprises Inc | NUS | Consumer Staples | 0.24% |
| Forward Air Corp | FWRD | Industrials | 0.24% |
| Designer Brands Inc | DBI | Consumer Discretionary | 0.23% |
| FirstCash Inc | FCFS | Financials | 0.23% |
| Neenah Inc | NP | Materials | 0.22% |
| Universal Corp/VA | UVV | Consumer Staples | 0.22% |
| ADTRAN Inc | ADTN | Information Technology | 0.22% |
| Children's Place Inc/The | PLCE | Consumer Discretionary | 0.22% |
| Buckle Inc/The | BKE | Consumer Discretionary | 0.22% |
| FNB Corp/PA | FNB | Financials | 0.22% |
| PolyOne Corp | POL | Materials | 0.22% |
| Inter Parfums Inc | IPAR | Consumer Staples | 0.22% |
| Umpqua Holdings Corp | UMPQ | Financials | 0.22% |
| Franklin Electric Co Inc | FELE | Industrials | 0.21% |
| Badger Meter Inc | BMI | Information Technology | 0.21% |
| First Hawaiian Inc | FHB | Financials | 0.21% |
| Spire Inc | SR | Utilities | 0.21% |
| United Bankshares Inc/WV | UBSI | Financials | 0.21% |
| Regal Beloit Corp | RBC | Industrials | 0.21% |
| Walker & Dunlop Inc | WD | Financials | 0.20% |
| Brightsphere Investment Group | BSIG | Financials | 0.20% |
| Bank of Hawaii Corp | BOH | Financials | 0.20% |
| Medifast Inc | MED | Consumer Staples | 0.20% |
| Columbia Sportswear Co | COLM | Consumer Discretionary | 0.20% |
| Kennametal Inc | KMT | Industrials | 0.19% |
| Antero Midstream Corp | AM | Energy | 0.19% |
| McGrath RentCorp | MGRC | Industrials | 0.19% |
| Telephone & Data Systems Inc | TDS | Communication Services | 0.19% |
| Dana Inc | DAN | Consumer Discretionary | 0.19% |
| NorthWestern Corp | NWE | Utilities | 0.19% |
| Cal-Maine Foods Inc | CALM | Consumer Staples | 0.19% |
| Black Hills Corp | BKH | Utilities | 0.19% |
| Ryder System Inc | R | Industrials | 0.18% |
| CVR Energy Inc | CVI | Energy | 0.18% |
| Cathay General Bancorp | CATY | Financials | 0.18% |
| Scholastic Corp | SCHL | Communication Services | 0.18% |
| Schweitzer-Mauduit Internation | SWM | Materials | 0.18% |
| Home BancShares Inc/AR | HOMB | Financials | 0.17% |
| Benchmark Electronics Inc | BHE | Information Technology | 0.17% |
| Sensient Technologies Corp | SXT | Materials | 0.17% |
| Avista Corp | AVA | Utilities | 0.17% |
| Innospec Inc | IOSP | Materials | 0.16% |
| Oxford Industries Inc | OXM | Consumer Discretionary | 0.16% |
| CVB Financial Corp | CVBF | Financials | 0.16% |
| PriceSmart Inc | PSMT | Consumer Staples | 0.16% |
| Southwest Gas Holdings Inc | SWX | Utilities | 0.16% |
| HB Fuller Co | FUL | Materials | 0.16% |
| Korn Ferry | KFY | Industrials | 0.16% |
| PNM Resources Inc | PNM | Utilities | 0.16% |
| Worthington Industries Inc | WOR | Materials | 0.15% |
| Covanta Holding Corp | CVA | Industrials | 0.15% |
| Quaker Chemical Corp | KWR | Materials | 0.15% |
| Raven Industries Inc | RAVN | Industrials | 0.15% |
| Otter Tail Corp | OTTR | Utilities | 0.15% |
| Jack in the Box Inc | JACK | Consumer Discretionary | 0.15% |
| Bloomin' Brands Inc | BLMN | Consumer Discretionary | 0.14% |
| Kaman Corp | KAMN | Industrials | 0.14% |
| Werner Enterprises Inc | WERN | Industrials | 0.14% |
| Cooper Tire & Rubber Co | CTB | Consumer Discretionary | 0.14% |
| First Financial Bancorp | FFBC | Financials | 0.14% |
| Dine Brands Global Inc | DIN | Consumer Discretionary | 0.13% |
| MGE Energy Inc | MGEE | Utilities | 0.13% |
| El Paso Electric Co | EE | Utilities | 0.13% |
| Pattern Energy Group Inc | PEGI | Utilities | 0.13% |
| Signet Jewelers Ltd | SIG | Consumer Discretionary | 0.13% |
| Penske Automotive Group Inc | PAG | Consumer Discretionary | 0.13% |
| Schneider National Inc | SNDR | Industrials | 0.13% |
| First Merchants Corp | FRME | Financials | 0.13% |
| International Bancshares Corp | IBOC | Financials | 0.12% |
| Ethan Allen Interiors Inc | ETH | Consumer Discretionary | 0.12% |
| La-Z-Boy Inc | LZB | Consumer Discretionary | 0.12% |
| Mueller Industries Inc | MLI | Industrials | 0.12% |
| Comfort Systems USA Inc | FIX | Industrials | 0.12% |
| Acushnet Holdings Corp | GOLF | Consumer Discretionary | 0.12% |
| Trinseo SA | TSE | Materials | 0.11% |
| Dave & Buster's Entertainment | PLAY | Consumer Discretionary | 0.11% |
| National Presto Industries Inc | NPK | Industrials | 0.11% |
| Cadence BanCorp | CADE | Financials | 0.11% |
| Weis Markets Inc | WMK | Consumer Staples | 0.11% |
| Great Western Bancorp Inc | GWB | Financials | 0.11% |
| WesBanco Inc | WSBC | Financials | 0.11% |
| Employers Holdings Inc | EIG | Financials | 0.10% |
| Steelcase Inc | SCS | Industrials | 0.10% |
| Guess? Inc | GES | Consumer Discretionary | 0.10% |
| Northwest Bancshares Inc | NWBI | Financials | 0.10% |
| Tredegar Corp | TG | Materials | 0.10% |
| Greif Inc | GEF | Materials | 0.10% |
| Northwest Natural Holding Co | NWN | Utilities | 0.10% |
| EnPro Industries Inc | NPO | Industrials | 0.10% |
| Schnitzer Steel Industries Inc | SCHN | Materials | 0.09% |
| Calavo Growers Inc | CVGW | Consumer Staples | 0.09% |
| Boise Cascade Co | BCC | Materials | 0.09% |
| Core-Mark Holding Co Inc | CORE | Consumer Discretionary | 0.09% |
| GameStop Corp | GME | Consumer Discretionary | 0.09% |
| Orion Engineered Carbons SA | OEC | Materials | 0.09% |
| AZZ Inc | AZZ | Industrials | 0.08% |
| Provident Financial Services I | PFS | Financials | 0.08% |
| BJ's Restaurants Inc | BJRI | Consumer Discretionary | 0.08% |
| B&G Foods Inc | BGS | Consumer Staples | 0.08% |
| Myers Industries Inc | MYE | Materials | 0.08% |
| Kelly Services Inc | KELYA | Industrials | 0.08% |
| Sandy Spring Bancorp Inc | SASR | Financials | 0.07% |
| Virtu Financial Inc | VIRT | Financials | 0.07% |
| Innophos Holdings Inc | IPHS | Materials | 0.07% |
| S&T Bancorp Inc | STBA | Financials | 0.07% |
| City Holding Co | CHCO | Financials | 0.07% |
| Atlantica Yield plc | AY | Utilities | 0.07% |
| Apogee Enterprises Inc | APOG | Industrials | 0.06% |
| Copa Holdings SA | CPA | Industrials | 0.06% |
| Lindsay Corp | LNN | Industrials | 0.06% |
| Quanex Building Products Corp | NX | Industrials | 0.06% |
| TFS Financial Corp | TFSL | Financials | 0.05% |
| Washington Trust Bancorp Inc | WASH | Financials | 0.05% |
| Tootsie Roll Industries Inc | TR | Consumer Staples | 0.05% |
| Stock Yards Bancorp Inc | SYBT | Financials | 0.05% |
| Tupperware Brands Corp | TUP | Consumer Discretionary | 0.05% |
| ATN International Inc | ATNI | Communication Services | 0.05% |
| Community Trust Bancorp Inc | CTBI | Financials | 0.04% |
| TrustCo Bank Corp NY | TRST | Financials | 0.04% |
| TTEC Holdings Inc | TTEC | Information Technology | 0.04% |
| RPC Inc | RES | Energy | 0.03% |
| Hawaiian Holdings Inc | HA | Industrials | 0.02% |
| Gannett Co Inc | GCI | Communication Services | 0.02% |
| US DOLLAR | USD | 0.24% |
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 11/30/2019) | 2.32% |
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.