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Is WisdomTree U.S. SmallCap ETF (EES) a Strong ETF Right Now?
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Making its debut on 02/23/2007, smart beta exchange traded fund WisdomTree U.S. SmallCap ETF (EES - Free Report) provides investors broad exposure to the Style Box - Small 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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 $604.78 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index before fees and expenses.
The WisdomTree U.S. SmallCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the small-capitalization segment of the U.S. Stock Market.
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.
Operating expenses on an annual basis are 0.38% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.28%.
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.
EES's heaviest allocation is in the Financials sector, which is about 25.30% of the portfolio. Its Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Cal-Maine Foods Inc (CALM - Free Report) accounts for about 0.77% of total assets, followed by Tpg Inc (TPG - Free Report) and O-I Glass Inc (OI - Free Report) .
EES's top 10 holdings account for about 6.11% of its total assets under management.
Performance and Risk
The ETF has lost about -2.53% and is up about 16.94% so far this year and in the past one year (as of 05/29/2024), respectively. EES has traded between $40.06 and $50.69 during this last 52-week period.
The fund has a beta of 1.27 and standard deviation of 21.51% for the trailing three-year period, which makes EES a medium risk choice in this particular space. With about 907 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.70 billion in assets, Vanguard Small-Cap Value ETF has $28.15 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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. SmallCap ETF (EES) a Strong ETF Right Now?
Making its debut on 02/23/2007, smart beta exchange traded fund WisdomTree U.S. SmallCap ETF (EES - Free Report) provides investors broad exposure to the Style Box - Small 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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 $604.78 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index before fees and expenses.
The WisdomTree U.S. SmallCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the small-capitalization segment of the U.S. Stock Market.
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.
Operating expenses on an annual basis are 0.38% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.28%.
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.
EES's heaviest allocation is in the Financials sector, which is about 25.30% of the portfolio. Its Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Cal-Maine Foods Inc (CALM - Free Report) accounts for about 0.77% of total assets, followed by Tpg Inc (TPG - Free Report) and O-I Glass Inc (OI - Free Report) .
EES's top 10 holdings account for about 6.11% of its total assets under management.
Performance and Risk
The ETF has lost about -2.53% and is up about 16.94% so far this year and in the past one year (as of 05/29/2024), respectively. EES has traded between $40.06 and $50.69 during this last 52-week period.
The fund has a beta of 1.27 and standard deviation of 21.51% for the trailing three-year period, which makes EES a medium risk choice in this particular space. With about 907 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.70 billion in assets, Vanguard Small-Cap Value ETF has $28.15 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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.