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Is WisdomTree U.S. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?
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The WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) was launched on 05/22/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
Managed by Wisdomtree, DGRW has amassed assets over $6.65 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index.
The WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics.
Cost & Other Expenses
Since 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.28%.
It has a 12-month trailing dividend yield of 1.97%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 26.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Industrials round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 5.41% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 36.01% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Quality Dividend Growth ETF has gained about 18.33% so far, and is up roughly 24.80% over the last 12 months (as of 10/26/2021). DGRW has traded between $47.73 and $62.73 in this past 52-week period.
The ETF has a beta of 0.94 and standard deviation of 21.67% for the trailing three-year period, making it a medium risk choice in the space. With about 298 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could 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 $21.02 billion in assets, Vanguard Dividend Appreciation ETF has $65.06 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 Style Box - Large Cap Value.
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 U.S. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?
The WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) was launched on 05/22/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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
Managed by Wisdomtree, DGRW has amassed assets over $6.65 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index.
The WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics.
Cost & Other Expenses
Since 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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.28%.
It has a 12-month trailing dividend yield of 1.97%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 26.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Healthcare and Industrials round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 5.41% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Johnson & Johnson (JNJ - Free Report) .
The top 10 holdings account for about 36.01% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Quality Dividend Growth ETF has gained about 18.33% so far, and is up roughly 24.80% over the last 12 months (as of 10/26/2021). DGRW has traded between $47.73 and $62.73 in this past 52-week period.
The ETF has a beta of 0.94 and standard deviation of 21.67% for the trailing three-year period, making it a medium risk choice in the space. With about 298 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could 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 $21.02 billion in assets, Vanguard Dividend Appreciation ETF has $65.06 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 Style Box - Large Cap Value.
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.