I suggest looking at a new ETF, the O'Shares FTSE Russell Small Cap Quality Dividend ETF (OUSM). It was recently launched by Shark Tank's Kevin O'Leary, observes Richard Croft, contributing editor to Internet Wealth Builder.
This fund holds a basket of 200+ profitable companies in the Russell 2000 index. The Russell is an index of 2,000 smaller cap companies with businesses primarily domiciled in the U.S.
Because OUSM only holds profitable, dividend-paying companies, they immediately benefit from having their effective tax rate reduced from 37% to 21%.
That should provide these businesses with a significant tailwind. And because it is a basket of companies, you gain diversification through the ETF eliminating much of the risks unique to individual companies.
The ETF was launched at the end of 2016, so we have a very limited history to work with. But, so far, results have been quite good with a one-year return of 8.9% as of May 31.
Even though it has only been around for a short time, it has attracted a lot of investor interest, with almost $140 million in assets under management to this point (figures in U.S. currency). The expense ratio is 0.48%.
The fund makes monthly distributions, which vary but usually run in the range of $0.06 per unit. In terms of sector distribution, industrials make up about 24% of the portfolio with financials at 18% and consumer discretionary 16%.
Buy. This ETF is well positioned to benefit from the Trump tailwinds while having limited exposure to the headwinds his trade policies are creating.
