IUS: Low-Valuation ETF Outperforming Peers

Summary

• IUS offers a unique value tilt via business-size weighting, resulting in diversified sector exposure and valuations in line with traditional value ETFs.
• While not a pure value fund, IUS balances value and a more aggressive sector exposure, outperforming peers and matching the Russell 1000’s returns over five years.
• The fund’s drawbacks include higher volatility, lower liquidity, higher expense ratio, and modest dividend yield relative to peers.
• I recommend IUS as a long-term value component for diversified portfolios, but not for short-term trades due to transaction costs and spreads.

We Are

The Invesco RAFI Strategic US ETF (NASDAQ:IUS) brings to investors an alternative path to have exposure to value stocks. Based on its business size weighting methodology, the fund offers a sector allocation skewed toward sectors not usually favored

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.