Is Vident U.S. Equity Strategy ETF (VUSE) a Strong ETF Right Now?

Making its debut on 01/22/2014, smart beta exchange traded fund Vident U.S. Equity Strategy ETF (VUSE) provides investors broad exposure to the Style Box - All Cap Value category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $587.56 million, this makes it one of the larger ETFs in the Style Box - All Cap Value. VUSE is managed by Vident Financial. This particular fund seeks to match the performance of the Vident Core U.S. Equity Fund Index before fees and expenses.

The Vident U.S. Quality Index is a rules-based, systematic strategy index comprised of equity securities principally traded in the U.S. market of issuers domiciled in the United States.

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 on par with most peer products in the space, this ETF has annual operating expenses of 0.50%.

It's 12-month trailing dividend yield comes in at 0.79%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

For VUSE, it has heaviest allocation in the Information Technology sector --about 26.30% of the portfolio --while Financials and Consumer Discretionary round out the top three.

When you look at individual holdings, Walmart Inc (WMT) accounts for about 2.67% of the fund's total assets, followed by Broadcom Inc (AVGO) and Nvidia Corp (NVDA).

The top 10 holdings account for about 22.24% of total assets under management.

Performance and Risk

The ETF has gained about 1.63% and is up roughly 12.30% so far this year and in the past one year (as of 05/27/2025), respectively. VUSE has traded between $50.72 and $62.63 during this last 52-week period.

The fund has a beta of 0.98 and standard deviation of 17.53% for the trailing three-year period, which makes VUSE a medium risk choice in this particular space. With about 130 holdings, it effectively diversifies company-specific risk.

Alternatives

Vident U.S. Equity Strategy ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

Capital Group Dividend Value ETF (CGDV) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV) tracks S&P 900 Value Index. Capital Group Dividend Value ETF has $16.13 billion in assets, iShares Core S&P U.S. Value ETF has $19.79 billion. CGDV has an expense ratio of 0.33% and IUSV charges 0.04%.

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

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