How should investors understand U.S. equities to start 2024? On the one hand, the market is very expensive, and the so-called “Magnificent Seven” is particularly so. The Fed’s ongoing battle to tame inflation has also put a damper on markets, with much-desired rate cut relief not guaranteed. On the other hand, despite those challenges, the S&P 500 still rose last year. A U.S. dividend ETF like OUSA, for example, could provide one strong option.
See more: The Stocks Driving Small-Cap ETF OUSM
Why look to a dividend ETF as 2024 kicks into gear? Dividends may be back in vogue this year after a difficult time in 2023. The firms that provide dividends in 2024 are those that did well despite last year’s rate hikes. Their strong balance sheets that allow them to offer dividends attest to other positive attributes in their management that can make them an attractive investment opportunity.
What’s more, should the significant sums of cash sitting on the sidelines get back in, dividend strategies could benefit. If this year sees a risk-on recovery as seen by Bank of America, dividend strategies could lead, too. Investors may particularly seek out the benefits of current income, bolstering portfolios through volatility and be able to be reinvested.
Taken together, those factors speak to the case for a U.S. dividend ETF. The ALPS O’Shares U.S. Quality Dividend ETF (OUSA ) stands out in that category. As a U.S. dividend ETF, it sets itself apart by screening for U.S. large-cap stocks that meet four factor-based standards. OUSA’s index, the O’Shares US Quality Dividend Index, considers factors including quality, volatility, dividend yield, and dividend quality.
Charging 48 basis points, OUSA has returned 13% over the last three months, outperforming its FactSet Segment average. For investors on the lookout to grow their dividend allocation, OUSA may appeal.
VettaFi LLC (“VettaFi”) is the index provider for OUSA, for which it receives an index licensing fee. However, OUSA is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of OUSA.
For more news, information, and analysis, visit the ETF Building Blocks Channel.
