Dimensional US High Profitability ETF Faces Competition

Dimensional US High Profitability ETF (NYSEARCA:DUHP) has a total return of 18.11% since its last review on May 21, 2024. While it's a decent gain, it's not as strong as some other options in the market. The ETF focuses on high profitability stocks, which may be a good investment strategy, but investors should weigh the potential benefits against the competition and consider their overall financial goals before investing.

The Dimensional US High Profitability ETF (NYSEARCA:DUHP) has delivered an 18.11% total return since its last review on May 21, 2024. While this performance is commendable, it lags behind some other quality-focused ETFs, such as the iShares MSCI USA Quality GARP ETF (GARP) and the JP Morgan U.S. Quality Factor ETF (JQUA), which have outperformed DUHP significantly.

DUHP's strategy focuses on high profitability stocks, emphasizing a security's price-to-book value ratios and profitability metrics. The ETF has a 0.21% expense ratio and $9.05 billion in assets under management. Despite its active management, DUHP's portfolio turnover rates are low, indicating high conviction in its holdings.

However, DUHP's performance has been relatively stable compared to its competitors. Since its inception on February 23, 2022, DUHP has delivered a 55.79% total return, while GARP has surged ahead with a 90.60% gain. This significant outperformance of GARP can be attributed to its higher volatility and more growth-oriented portfolio, as evidenced by its 47.50% allocation to Technology stocks.

Investors should consider the fundamentals of DUHP and compare it with other ETFs to make an informed decision. DUHP's sector and size segment allocations demonstrate good diversification, with a sector diversification score of 6.41/10. However, its high exposure to Health Care stocks, particularly through acquisitions, could pose some risks.

The competition for DUHP is stiff, with several other ETFs offering attractive alternatives. The Vanguard S&P 500 ETF (NYSEMKT:VOO), for instance, has delivered an average annual total return of 13.6% since its inception in September 2010. Investors should weigh the potential benefits of DUHP's high profitability focus against the competition and consider their overall financial goals before investing.

References:
[1] https://seekingalpha.com/article/4805632-duhp-dimensionals-high-profitability-etf-faces-stiff-competition
[2] https://finance.yahoo.com/news/3-vanguard-etfs-turn-500-094500790.html