The O’Shares FTSE US Quality Dividend ETF (NYSEArca: OUSA) was one of the first exchange traded funds brought to market by O’Shares Investments, the ETF issuer founded by “Shark Tank” personality Kevin O’Leary.
To its credit, OUSA has rapidly established a following among dividend investors in less than two years on the market. The O’Shares FTSE US Quality Dividend ETF cements O’Leary’s dividend commitment.
OUSA tracks the FTSE US Qual / Vol / Yield Factor Index, an expansion of FTSE Russell’s FTSE Global Factor Index Series. The index seizes on three prominent themes in the ETF community: Dividends along with the low volatility and quality factors.
Component holdings have stable cashflow to pay dividends, are diversified across 10 sectors to limit volatility and invest in quality companies with strong financial performances that may have a higher chance of appreciating over time.
The quality factor “attempts to capture companies that demonstrate healthy balance sheets and strong cash flows and avoid companies that are unprofitable or have high levels of debt on the balance sheet. This factor is a composite that considers variables such as profitability, efficiency and earnings quality,” according to Seeking Alpha.