Is Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ) a Strong ETF Right Now?

Launched on 06/28/2022, the Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Blend category of the market.What Are Smart Beta ETFs?The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.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.There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexThe fund is sponsored by Deutsche Bank Ag. It has amassed assets over $285.39 million, making it one of the average sized ETFs in the Style Box - All Cap Blend. USNZ seeks to match the performance of the SOLACTIVE ISS ESG US NT ZR PATHWY ENH ID before fees and expenses.The Solactive ISS ESG United States Net Zero Pathway Enhanced Index comprised of large and mid-capitalization companies in the United States that meet certain environmental, social and governance criteria.Cost & Other ExpensesSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.It has a 12-month trailing dividend yield of 1.02%.Sector Exposure and Top HoldingsMost 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.Taking into account individual holdings, Microsoft Corp (MSFT) accounts for about 8.67% of the fund's total assets, followed by Apple Inc (AAPL) and Nvidia Corp (NVDA.O).USNZ's top 10 holdings account for about 43.54% of its total assets under management.Performance and RiskThe ETF has gained about 18.86% and is up about 18.14% so far this year and in the past one year (as of 10/29/2025), respectively. USNZ has traded between $31.29 and $43.88 during this last 52-week period. The fund has a beta of 1.00 and standard deviation of 15.86% for the trailing three-year period. With about 318 holdings, it effectively diversifies company-specific risk .AlternativesXtrackers Net Zero Pathway Paris Aligned US Equity 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.Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. Vanguard ESG U.S. Stock ETF has $11.95 billion in assets, iShares ESG Aware MSCI USA ETF has $15.27 billion. ESGV has an expense ratio of 0.09% and ESGU changes 0.15%.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 BlendBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Xtrackers Net Zero Pathway Paris Aligned US Equity ETF (USNZ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks