Is Xtrackers Russell US Multifactor ETF (DEUS) a Strong ETF Right Now?

Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Xtrackers Russell US Multifactor ETF (DEUS) is a smart beta exchange traded fund launched on 11/24/2015.

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.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

The fund is sponsored by Deutsche Bank Ag. It has amassed assets over $214.55 million, making it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Russell 1000 Comprehensive Factor Index.

The Russell 1000 Comprehensive Factor Index provides exposure to domestic equities based on five factors Quality, Value, Momentum, Low Volatility and Size.

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.

Operating expenses on an annual basis are 0.17% for this ETF, which makes it one of the cheaper products in the space.

It's 12-month trailing dividend yield comes in at 1.58%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Cardinal Health Inc (CAH) accounts for about 1.7% of total assets, followed by Amerisourcebergen Corp (ABC) and Mckesson Corp (MCK).

DEUS's top 10 holdings account for about 8.96% of its total assets under management.

Performance and Risk

The ETF has gained about 11.07% so far this year and is up about 10.17% in the last one year (as of 12/24/2025). In the past 52-week period, it has traded between $48.13 and $59.15

The fund has a beta of 0.93 and standard deviation of 13.42% for the trailing three-year period, which makes DEUS a medium risk choice in this particular space. With about 862 holdings, it effectively diversifies company-specific risk .

Alternatives

Xtrackers Russell US Multifactor ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.

iShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. iShares Core S&P 500 ETF has $766.01 billion in assets, Vanguard S&P 500 ETF has $829.11 billion. IVV has an expense ratio of 0.03% and VOO changes 0.03%.

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 - Large Cap Blend

Bottom Line

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

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