OUSM vs VIG

OUSMCALPS O'Shares U.S. Small-Cap Quality Dividend ETF

VIGAVanguard Dividend Appreciation ETF

In short

OUSM Most dividend ETFs shop the large-cap aisle. OUSM works the small-cap end instead, screening for quality balance sheets, lower volatility and dividend growth, then paying out monthly.

VIG VIG buys dividend growth, not fat yields: about 300 US companies with a record of raising their payouts, tracked for 0.04% a year. Running since 2006 and now north of $100 billion, it is the plain-vanilla anchor of the dividend-screen aisle.

Stated mandate

OUSM OUSM seeks to track the performance of the O'Shares U.S. Small-Cap Quality Dividend Index before fees and expenses. Its portfolio consists of U.S. small-cap dividend-paying companies selected for quality, low volatility, and dividend-growth characteristics.

VIG The fund seeks to track the S&P U.S. Dividend Growers Index, which represents common stocks of companies with a record of increasing dividends over time.

Why people hold it

• OUSM Small-cap and dividend rarely share a shelf. The index screens roughly 110 U.S. small caps for quality, low volatility and dividend growth, a corner the big dividend funds mostly skip.alpsfunds.com
• Distributions land monthly rather than quarterly, an uncommon cadence for a stock fund.
• Live since 2016 and still doing the one job on the label: track a small-cap quality dividend index, with no drift up into large caps.

• VIG At 0.04% a year, the fee is roughly a tenth of the typical dividend-screen fund's 0.39%, and undercuts every other top-graded fund in the group, DGRO and SCHD included.
• The screen rewards a record of increasing dividends rather than the biggest current payout, so the basket leans on payout discipline instead of stretched yields.
• Live since 2006, over $100 billion in assets and actively traded, which shows up as easy fills rather than wide spreads.
• About 300 holdings, cash paid quarterly, and one of the strongest overall implementations in its dividend-screen peer group.

Worth knowing

• OUSM 0.48% a year is the toll for the small-cap screen. Large-cap dividend heavyweights in the same group, including SCHD, VIG and DGRO, charge a fraction of that.
• Small caps swing harder than blue chips. The low-volatility screen softens the ride; it does not flatten it.
• Moderately traded rather than a category volume leader, so spreads can run wider than in the giant dividend funds.

• VIG Growth of payouts, not maximum income, is the mandate. That puts it on a different axis than high-dividend funds such as SPYD.
• US stocks only, no bonds and no overseas payers, and sector weights are whatever the index screen spits out.
• Portfolio risk and concentration measures land mid-pack for the category: it is fully invested in equities and drops when the market drops.

Full OUSM profile⁠

Full VIG profile⁠