Is ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) a Strong ETF Right Now?

Designed to provide broad exposure to the Style Box - Mid Cap Value category of the market, the ProShares S&P MidCap 400 Dividend Aristocrats ETF (REGL) is a smart beta exchange traded fund launched on 02/03/2015.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

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 managed by Proshares. REGL has been able to amass assets over $1.77 billion, making it one of the average sized ETFs in the Style Box - Mid Cap Value. Before fees and expenses, this particular fund 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 2.52%.

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.

This ETF has heaviest allocation in the Financials sector - about 30.90% of the portfolio. Industrials and Utilities round out the top three.

Taking into account individual holdings, Evercore Inc - A (EVR) accounts for about 2.09% of the fund's total assets, followed by Sei Investments Company (SEIC) and Cullen/frost Bankers Inc (CFR).

The top 10 holdings account for about 17.92% of total assets under management.

Performance and Risk

So far this year, REGL has added about 1.12%, and was up about 11.49% in the last one year (as of 06/02/2025). During this past 52-week period, the fund has traded between $72.52 and $88.79.

The ETF has a beta of 0.80 and standard deviation of 16.82% for the trailing three-year period, making it a medium risk choice in the space. With about 54 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 $31.06 billion in assets, Vanguard Dividend Appreciation ETF has $89.57 billion. DGRO has an expense ratio of 0.08% and VIG charges 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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This article originally published on Zacks Investment Research (zacks.com).

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