Is Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ) a Strong ETF Right Now?

A smart beta exchange traded fund, the Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ) debuted on 06/28/2022, and offers broad exposure to the Style Box - All Cap Blend category of the market.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is managed by Deutsche Bank Ag, and has been able to amass over $238.37 million, which makes it one of the average sized ETFs in the Style Box - All Cap Blend. This particular fund seeks to match the performance of the SOLACTIVE ISS ESG US NT ZR PATHWY ENH ID before fees and expenses.The Solactive ISS ESG United States Net Zero Pathway Enhanced Index comprised of large and mid-capitalization companies in the United States that meet certain environmental, social and governance criteria.Cost & Other ExpensesExpense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.Operating expenses on an annual basis are 0.10% for this ETF, which makes it one of the least expensive products in the space.USNZ's 12-month trailing dividend yield is 1.08%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.When you look at individual holdings, Apple Inc (AAPL) accounts for about 8.58% of the fund's total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA.O).USNZ's top 10 holdings account for about 36.89% of its total assets under management.Performance and RiskThe ETF has gained about 25.41% and was up about 26.88% so far this year and in the past one year (as of 12/16/2024), respectively. USNZ has traded between $30.28 and $38.78 during this last 52-week period.USNZ has a beta of 1 and standard deviation of 15.85% for the trailing three-year period. With about 339 holdings, it effectively diversifies company-specific risk.AlternativesXtrackers Net Zero Pathway Paris Aligned US Equity ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.IShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) tracks ----------------------------------------. IShares ESG Aware MSCI USA ETF has $13.98 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $20.26 billion. ESGU has an expense ratio of 0.15% and JEPQ charges 0.35%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Blend.Bottom LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ): ETF Research Reports Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks