Making its debut on 02/03/2015, smart beta exchange traded fund ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) provides investors broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Proshares, REGL has amassed assets over $1.8 billion, making it one of the average sized ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the S&P MidCap 400 Dividend Aristocrats Index.
The S&P MidCap 400 Dividend Aristocrats Index targets companies that are currently members of the S&P MidCap 400 Index and have increased dividend payments each year for at least 15 years.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.40%.
The fund has a 12-month trailing dividend yield of 2.29%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For REGL, it has heaviest allocation in the Financials sector --about 32.2% of the portfolio --while Industrials and Utilities round out the top three.
Looking at individual holdings, Evercore Inc - A (EVR) accounts for about 2.81% of total assets, followed by Polaris Inc (PII) and Thor Industries Inc (THO).
REGL's top 10 holdings account for about 20.85% of its total assets under management.
Performance and Risk
The ETF has added about 3.58% so far this year and it's up approximately 7.58% in the last one year (as of 08/05/2025). In the past 52-week period, it has traded between $72.71 and $88.79
REGL has a beta of 0.78 and standard deviation of 16.51% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 holdings, it effectively diversifies company-specific risk .
Alternatives
ProShares S&P MidCap 400 Dividend Aristocrats ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. iShares Core Dividend Growth ETF has $32.61 billion in assets, Vanguard Dividend Appreciation ETF has $93.16 billion. DGRO has an expense ratio of 0.08% and VIG changes 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Value
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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