Is Franklin U.S. Equity Index ETF (USPX) a Strong ETF Right Now?

Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the Franklin U.S. Equity Index ETF (USPX) is a smart beta exchange traded fund launched on 06/01/2016.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

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.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Managed by Franklin Templeton Investments, USPX has amassed assets over $1.55 billion, making it one of the larger ETFs in the Style Box - All Cap Blend. This particular fund seeks to match the performance of the MORNINGSTAR US TARGET MARKET EXPOSURE ID before fees and expenses.

The Morningstar US Target Market Exposure Index targets large and mid-capitalization U.S. stocks representing the top 85% of the U.S. equity market by float-adjusted market capitalization.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.03%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.19%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

This ETF has heaviest allocation in the Information Technology sector - about 33.1% of the portfolio. Financials and Telecom round out the top three.

Taking into account individual holdings, Nvidia Corp (NVDA) accounts for about 7.22% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 36.77% of total assets under management.

Performance and Risk

So far this year, USPX has lost about -3.98%, and is up about 17.15% in the last one year (as of 03/24/2026). During this past 52-week period, the fund has traded between $43.36 and $60.96.

The fund has a beta of 0.91 and standard deviation of 14.87% for the trailing three-year period. With about 510 holdings, it effectively diversifies company-specific risk .

Alternatives

Franklin U.S. Equity Index 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 Core S&P Total U.S. Stock Market ETF (ITOT) tracks S&P Total Market Index and the Vanguard Total Stock Market Index Fund ETF Shares (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $79.71 billion in assets, Vanguard Total Stock Market Index Fund ETF Shares has $563.24 billion. ITOT has an expense ratio of 0.03% and VTI changes 0.03%.

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 Line

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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Franklin U.S. Equity Index ETF (USPX): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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