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Is WisdomTree U.S. Total Dividend ETF (DTD) a Strong ETF Right Now?
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The WisdomTree U.S. Total Dividend ETF (DTD - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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 managed by Wisdomtree, and has been able to amass over $1.29 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, DTD seeks to match the performance of the WisdomTree U.S. Dividend Index.
The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity market.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.28%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.14%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For DTD, it has heaviest allocation in the Financials sector --about 19.10% of the portfolio --while Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.17% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
Its top 10 holdings account for approximately 23.64% of DTD's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Total Dividend ETF return is roughly 14.99% so far, and was up about 22.31% over the last 12 months (as of 08/20/2024). DTD has traded between $57.51 and $74.35 in this past 52-week period.
The fund has a beta of 0.90 and standard deviation of 14.20% for the trailing three-year period, which makes DTD a medium risk choice in this particular space. With about 826 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $58.67 billion in assets, Vanguard Value ETF has $122.45 billion. SCHD has an expense ratio of 0.06% 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. Total Dividend ETF (DTD) a Strong ETF Right Now?
The WisdomTree U.S. Total Dividend ETF (DTD - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination 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 managed by Wisdomtree, and has been able to amass over $1.29 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, DTD seeks to match the performance of the WisdomTree U.S. Dividend Index.
The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity market.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.28%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.14%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For DTD, it has heaviest allocation in the Financials sector --about 19.10% of the portfolio --while Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.17% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
Its top 10 holdings account for approximately 23.64% of DTD's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Total Dividend ETF return is roughly 14.99% so far, and was up about 22.31% over the last 12 months (as of 08/20/2024). DTD has traded between $57.51 and $74.35 in this past 52-week period.
The fund has a beta of 0.90 and standard deviation of 14.20% for the trailing three-year period, which makes DTD a medium risk choice in this particular space. With about 826 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $58.67 billion in assets, Vanguard Value ETF has $122.45 billion. SCHD has an expense ratio of 0.06% 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.