Should ALPS (OUSA) Be on Your Investing Radar?

Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the ALPS (OUSA) is a passively managed exchange traded fund launched on 07/14/2015.

The fund is sponsored by Alps. It has amassed assets over $787.18 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.48%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.37%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 25.60% of the portfolio. Information Technology and Healthcare round out the top three.

Looking at individual holdings, Visa Inc. (V) accounts for about 6.01% of total assets, followed by Apple Inc. (AAPL) and Home Depot Inc. (HD).

The top 10 holdings account for about 43.8% of total assets under management.

Performance and Risk

OUSA seeks to match the performance of the FTSE US Qual / Vol / Yield Factor 5% Capped Index before fees and expenses. The OShares U.S. Quality Dividend Index measures the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States.

The ETF has lost about -2.25% so far this year and was up about 8.04% in the last one year (as of 04/04/2025). In the past 52-week period, it has traded between $46.86 and $55.50.

The ETF has a beta of 0.86 and standard deviation of 13.48% for the trailing three-year period, making it a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.

Alternatives

ALPS carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, OUSA is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $68.10 billion in assets, Vanguard Value ETF has $129.18 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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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This article originally published on Zacks Investment Research (zacks.com).

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