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Is WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL) a Strong ETF Right Now?
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Launched on 06/16/2006, the WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL - Free Report) is a smart beta exchange traded fund offering broad exposure to the World ETFs 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $262.84 million, making it one of the average sized ETFs in the World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree Global ex-U.S. Quality Dividend Growth Index.
The WisdomTree Global ex-U.S. Quality Dividend Growth Index is a fundamentally weighted index that measures the performance of dividend paying stocks with growth characteristics in the developed and emerging markets outside of the United States.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It has a 12-month trailing dividend yield of 1.93%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Novo Nordisk A/s (NOVOB) accounts for about 7.02% of the fund's total assets, followed by British American Tobacco Plc (BATS) and Fortescue Metals Group Ltd (FMG).
The top 10 holdings account for about 36.61% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Global exU.S. Quality Dividend Growth ETF has gained about 9.54% so far, and is up about 17% over the last 12 months (as of 11/17/2020). DNL has traded between $46.16 and $71.05 in this past 52-week period.
The fund has a beta of 0.84 and standard deviation of 22.26% for the trailing three-year period, which makes DNL a medium risk choice in this particular space. With about 245 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Global exU.S. Quality Dividend Growth ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $13.33 billion in assets, Vanguard Dividend Appreciation ETF has $51.78 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
Bottom Line
To 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.
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Is WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL) a Strong ETF Right Now?
Launched on 06/16/2006, the WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL - Free Report) is a smart beta exchange traded fund offering broad exposure to the World ETFs 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $262.84 million, making it one of the average sized ETFs in the World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree Global ex-U.S. Quality Dividend Growth Index.
The WisdomTree Global ex-U.S. Quality Dividend Growth Index is a fundamentally weighted index that measures the performance of dividend paying stocks with growth characteristics in the developed and emerging markets outside of the United States.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It has a 12-month trailing dividend yield of 1.93%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Novo Nordisk A/s (NOVOB) accounts for about 7.02% of the fund's total assets, followed by British American Tobacco Plc (BATS) and Fortescue Metals Group Ltd (FMG).
The top 10 holdings account for about 36.61% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Global exU.S. Quality Dividend Growth ETF has gained about 9.54% so far, and is up about 17% over the last 12 months (as of 11/17/2020). DNL has traded between $46.16 and $71.05 in this past 52-week period.
The fund has a beta of 0.84 and standard deviation of 22.26% for the trailing three-year period, which makes DNL a medium risk choice in this particular space. With about 245 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Global exU.S. Quality Dividend Growth ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $13.33 billion in assets, Vanguard Dividend Appreciation ETF has $51.78 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
Bottom Line
To 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.