HDUS: Factor-Enhanced Large Cap Blend Fund Fails To Stand Out
Summary
- HDUS seeks to enhance a broad market Index of approximately 1,000 U.S. securities by emphasizing risk, value, momentum, and quality. It has $120 million in assets and a 0.19% ER.
- My analysis revealed only minor advantages in risk and momentum over broad-based ETFs like SPY and IWB. Unfortunately, I found no advantage in quality.
- Instead, HDUS could benefit from a 20.76x forward P/E that's about two points cheaper than its benchmark. I found similar discounts on other metrics like EV-EBITDA and EV-Sales.
- There's nothing necessarily wrong with these "value light" strategies, as they should slightly outperform in a value rotation. However, HDUS also sacrifices growth, so there's really nothing special here.
- As a result, I've assigned HDUS a "hold" rating, with a fundamental analysis comparing it with SPY, IWB, JQUA, and FFLC to follow.
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Investment Thesis
The Hartford Disciplined US Equity ETF ( NYSEARCA: HDUS ) seeks enhanced returns compared to broad-market funds like the iShares Russell 1000 ETF ( IWB ) by emphasizing the value, momentum, and quality factors while controlling for risk. While my fundamental analysis verified
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