Single factor-based, smart-beta ETF strategies can be used to target specific long-term risk premia. Traders have often used single factor ETFs to tactically increase or decrease exposure to a desired factor or rotate out a factor exposure in a changing market environment. But there are risks with single factor strategies.
Historical data indicate various factors perform well in particular years while others lag, making it difficult for investors to time exactly when one factor will outperform others. The difficulty in factor time underscores the utility of a multi-factor approach such as the one offered by DEUS.
DEUS allocates a combined 36% of its weight to industrial and consumer discretionary stocks. The financial services and technology sectors combine for 28.4% of the ETF’s weight.
DEUS has rapidly gained traction with investors as highlighted by the ETF’s nearly $78 million in assets under management, an impressive sum considering the ETF debuted in October.
For more on Smart Beta ETFs, visit the Smart Beta Channel home page.