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Is WisdomTree U.S. SmallCap ETF (EES) a Strong ETF Right Now?
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The WisdomTree U.S. SmallCap ETF (EES - Free Report) was launched on 02/23/2007, and is a smart beta exchange traded fund designed to offer 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
EES is managed by Wisdomtree, and this fund has amassed over $625.88 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
EES's 12-month trailing dividend yield is 1.33%.
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.
For EES, it has heaviest allocation in the Financials sector --about 27% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Lumen Technologies Inc (LUMN - Free Report) accounts for about 1.24% of the fund's total assets, followed by Cal-Maine Foods Inc (CALM - Free Report) and Bread Financial Holdingsinc (BFH - Free Report) .
EES's top 10 holdings account for about 7.18% of its total assets under management.
Performance and Risk
The ETF has added roughly 5.72% so far this year and it's up approximately 25.91% in the last one year (as of 10/07/2024). In the past 52-week period, it has traded between $40.06 and $53.68.
The ETF has a beta of 1.23 and standard deviation of 21.86% for the trailing three-year period, making it a medium risk choice in the space. With about 887 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.
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 $13.75 billion in assets, Vanguard Small-Cap Value ETF has $30.57 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.
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Is WisdomTree U.S. SmallCap ETF (EES) a Strong ETF Right Now?
The WisdomTree U.S. SmallCap ETF (EES - Free Report) was launched on 02/23/2007, and is a smart beta exchange traded fund designed to offer 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
EES is managed by Wisdomtree, and this fund has amassed over $625.88 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
EES's 12-month trailing dividend yield is 1.33%.
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.
For EES, it has heaviest allocation in the Financials sector --about 27% of the portfolio --while Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Lumen Technologies Inc (LUMN - Free Report) accounts for about 1.24% of the fund's total assets, followed by Cal-Maine Foods Inc (CALM - Free Report) and Bread Financial Holdingsinc (BFH - Free Report) .
EES's top 10 holdings account for about 7.18% of its total assets under management.
Performance and Risk
The ETF has added roughly 5.72% so far this year and it's up approximately 25.91% in the last one year (as of 10/07/2024). In the past 52-week period, it has traded between $40.06 and $53.68.
The ETF has a beta of 1.23 and standard deviation of 21.86% for the trailing three-year period, making it a medium risk choice in the space. With about 887 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.
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 $13.75 billion in assets, Vanguard Small-Cap Value ETF has $30.57 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.