ETF Spotlight on the Lattice US Equity Strategy ETF (NYSEArca: ROUS), part of an ongoing series.
Assets: $22.6 million
Objective: The Lattice U.S. Equity Strategy ETF tries to reflect the performance of the Lattice Risk-Optimized US Large Cap Equity Strategy Index, which select U.S. companies with favorable combinations of diversified risk premium.
Holdings: Top holdings include Best Buy (NYSE: BBY) 1.4%, Kroger Co. (NYSE: KR) 1.4%, Valero Energy Corp (NYSE: VLO) 1.2%, Centene Corp (NYSE: CNC) 1.1% and Marathon Petroleum (NYSE: MPC) 1.1%.
What You Should Know:
- Lattice Strategies sponsors the ETF.
- ROUS has a 0.35% expense ratio.
- The ETF has 312 components and the top ten make up 10.9% of the overall portfolio.
- Sector allocations include financials 19.2%, information technology 16.1%, consumer discretionary 15.8%, healthcare 12.8%, industrials 10.5%, consumer staples 9.6%, energy 7.8%, utilities 3.9% and telecom services 1.7%.
- The fund began trading February 25, 2015.
- ROUS is up 1.9% since its inception.
- The fund follows a customized, smart-beta index that targets large U.S. stocks but reduces capital concentration in mega-cap multi-national companies.
- The diminished exposure to large multi-national companies may help ROUS outperform other market-cap-weighted stock funds if the U.S. dollar continues to strengthen since an appreciating USD would weaken profits for companies with overseas revenue streams.
- Additionally, the ETF emphasizes companies with favorable, diversified risk premia, including valuation, momentum, and quality.
- Specifically, the index may pick stocks based on the price-to-earnings ratio, price-to-book ratio and standard deviation as a measure of volatility.
- Component holdings are reconstituted and rebalanced semiannually.
Next page: The latest news
The Latest News:
- U.S. stocks were off for the third session in a row Wednesday on weaker economic data.
- The sell-off was triggered on news that orders for durable goods dipped 1.4% in February month-over-month, which suggested that the economy slowed at the start of the year, the Wall Street Journal reports.
- “The concern about the durable goods orders being down is that the economy is slowing and consumers are spending less,” Greg Peterson, director of investment research at Ballentine Partners, said in the WSJ article.
- However, some argue that investors shouldn’t put too much stock in the durable goods numbers since the severe winter storms kept consumers from shopping.
Lattice US Equity Strategy ETF
Source: Yahoo! Finance
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.