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Should Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS) Be on Your Investing Radar?

Zacks Equity Research

Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS), a passively managed exchange traded fund launched on 11/24/2015.

The fund is sponsored by Deutsche Bank. It has amassed assets over $204.56 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.17%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.58%.

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.

Looking at individual holdings, Autozone Inc (AZO) accounts for about 0.82% of total assets, followed by Target Corp (TGT) and Darden Restaurants (DRI.N).

The top 10 holdings account for about 6.84% of total assets under management.

Performance and Risk

DEUS seeks to match the performance of the Russell 1000 Comprehensive Factor Index before fees and expenses. The Russell 1000 Comprehensive Factor Index provides exposure to domestic equities based on five factors Quality, Value, Momentum, Low Volatility and Size.

The ETF has added roughly 13.56% so far this year and it's up approximately 2.21% in the last one year (as of 05/24/2019). In the past 52-week period, it has traded between $27.13 and $34.12.

The ETF has a beta of 0.99 and standard deviation of 11.53% for the trailing three-year period, making it a medium risk choice in the space. With about 827 holdings, it effectively diversifies company-specific risk.

Alternatives

Xtrackers Russell 1000 Comprehensive Factor ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DEUS is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $172.99 B in assets, SPDR S&P 500 ETF has $260.60 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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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Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS): ETF Research Reports
 
AutoZone, Inc. (AZO) : Free Stock Analysis Report
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
Target Corporation (TGT) : Free Stock Analysis Report
 
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