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Is WisdomTree U.S. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $3.57 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. DLN seeks to match the performance of the WisdomTree U.S. LargeCap Dividend Index before fees and expenses.
The WisdomTree U.S. LargeCap Dividend Index is a fundamentally weighted index that measures the performance of the large-capitalization segment of the U.S. dividend-paying market.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.28% for DLN, making it on par with most peer products in the space.
DLN's 12-month trailing dividend yield is 2.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
DLN's heaviest allocation is in the Information Technology sector, which is about 18.90% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 4.03% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
DLN's top 10 holdings account for about 26.1% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. LargeCap Dividend ETF has added roughly 5% so far, and is up about 8.74% over the last 12 months (as of 09/01/2023). DLN has traded between $55.26 and $65.66 in this past 52-week period.
DLN has a beta of 0.89 and standard deviation of 14.83% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 301 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap Dividend 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 Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $50.70 billion in assets, Vanguard Value ETF has $101.31 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $3.57 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. DLN seeks to match the performance of the WisdomTree U.S. LargeCap Dividend Index before fees and expenses.
The WisdomTree U.S. LargeCap Dividend Index is a fundamentally weighted index that measures the performance of the large-capitalization segment of the U.S. dividend-paying market.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.28% for DLN, making it on par with most peer products in the space.
DLN's 12-month trailing dividend yield is 2.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
DLN's heaviest allocation is in the Information Technology sector, which is about 18.90% of the portfolio. Its Healthcare and Financials round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 4.03% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
DLN's top 10 holdings account for about 26.1% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. LargeCap Dividend ETF has added roughly 5% so far, and is up about 8.74% over the last 12 months (as of 09/01/2023). DLN has traded between $55.26 and $65.66 in this past 52-week period.
DLN has a beta of 0.89 and standard deviation of 14.83% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 301 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap Dividend 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 Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $50.70 billion in assets, Vanguard Value ETF has $101.31 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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.