DUHP ETF

One investment trend that is becoming popular for 2025 is the revival of value investing, which can provide important diversification and possibly higher returns. There is also a strong emphasis on quality within value investing.

Investing in quality approaches is still suitable today, as they have historically provided returns similar to the overall market but with less risk. The Dimensional US High Profitability ETF includes a range of sectors like technology, industrials, healthcare, and consumer staples. The stock choices in DUHP have led to increased profitability, while its valuation is close to that of the overall index and other quality ETFs.

DUHP is an actively-managed large-cap blend ETF emphasizing high-quality stocks, as measured by earnings relative to book value or assets. Expenses are 0.22% and DUHP has $5.66 billion in assets. DUHP is also broadly-diversified, with exposure to 85/160 GICS sub-industries. Total Magnificent Seven exposure is only 14.54%, as DUHP excludes Alphabet, Amazon, Meta Platforms, and Tesla. DUHP serves as an excellent complement to JQUA. With only 38% overlap, an equal-weight portfolio of these two ETFs is better-diversified than SPY while offering investors a slightly lower P/E.

In pursuit of capital appreciation, actively managed DUHP favors large-size, solidly profitable U.S. companies. Since my April 2023 note, DUHP has delivered an impressive return, which I believe was predominantly driven by the IT sector and the growth factor. DUHP has a lot to offer regarding profitability but not much growth, and its performance is lagging a bit compared to JQUA and QUAL.