We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is WisdomTree U.S. SmallCap Dividend ETF (DES) a Strong ETF Right Now?
Read MoreHide Full Article
A smart beta exchange traded fund, the WisdomTree U.S. SmallCap Dividend ETF (DES - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Wisdomtree, DES has amassed assets over $2.01 billion, making it one of the larger ETFs in the Style Box - Small Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Dividend Index.
The WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the US dividend-paying market.
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.
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 2.75%.
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 DES, it has heaviest allocation in the Financials sector --about 26.80% of the portfolio --while Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Organon & Co (OGN - Free Report) accounts for about 1.58% of total assets, followed by Tfs Financial Corp (TFSL - Free Report) and Epr Properties (EPR - Free Report) .
The top 10 holdings account for about 8.18% of total assets under management.
Performance and Risk
The ETF has added about 7.41% and it's up approximately 25.31% so far this year and in the past one year (as of 10/03/2024), respectively. DES has traded between $26.55 and $34.92 during this last 52-week period.
The ETF has a beta of 1.09 and standard deviation of 19.73% for the trailing three-year period, making it a medium risk choice in the space. With about 589 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap Dividend 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.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $13.55 billion in assets, Vanguard Small-Cap Value ETF has $30.08 billion. AVUV has an expense ratio of 0.25% 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is WisdomTree U.S. SmallCap Dividend ETF (DES) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree U.S. SmallCap Dividend ETF (DES - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Wisdomtree, DES has amassed assets over $2.01 billion, making it one of the larger ETFs in the Style Box - Small Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Dividend Index.
The WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the US dividend-paying market.
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.
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 2.75%.
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 DES, it has heaviest allocation in the Financials sector --about 26.80% of the portfolio --while Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Organon & Co (OGN - Free Report) accounts for about 1.58% of total assets, followed by Tfs Financial Corp (TFSL - Free Report) and Epr Properties (EPR - Free Report) .
The top 10 holdings account for about 8.18% of total assets under management.
Performance and Risk
The ETF has added about 7.41% and it's up approximately 25.31% so far this year and in the past one year (as of 10/03/2024), respectively. DES has traded between $26.55 and $34.92 during this last 52-week period.
The ETF has a beta of 1.09 and standard deviation of 19.73% for the trailing three-year period, making it a medium risk choice in the space. With about 589 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap Dividend 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.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $13.55 billion in assets, Vanguard Small-Cap Value ETF has $30.08 billion. AVUV has an expense ratio of 0.25% 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.