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

Zacks Equity Research

The Xtrackers Russell 1000 Comprehensive Factor ETF (DEUS) was launched on 11/24/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Deutsche Bank. It has amassed assets over $221.34 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. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

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

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

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 1.62%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Lam Research Corp (LRCX.O) accounts for about 0.81% of total assets, followed by Cdw Corp (CDW.O) and Cummins Inc (CMI).

The top 10 holdings account for about 6.08% 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 about 26.01% so far this year and is up about 16.09% in the last one year (as of 11/20/2019). In the past 52-week period, it has traded between $27.13 and $35.70.

The ETF has a beta of 0.97 and standard deviation of 11.66% for the trailing three-year period, making it a medium risk choice in the space. With about 842 holdings, it effectively diversifies company-specific risk.

Alternatives

Xtrackers Russell 1000 Comprehensive Factor ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DEUS is an outstanding option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

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 $196.14 B in assets, SPDR S&P 500 ETF has $280.43 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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
 
Cummins Inc. (CMI) : Free Stock Analysis Report
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
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