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Is WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS) a Strong ETF Right Now?
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The WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) was launched on 07/25/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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
Managed by Wisdomtree, DGRS has amassed assets over $206.87 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, DGRS seeks to match the performance of the WisdomTree U.S. SmallCap Quality Dividend Growth Index.
The WisdomTree U.S. SmallCap Quality Dividend Growth Index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying stocks with growth characteristics.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
It has a 12-month trailing dividend yield of 2.06%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Industrials sector - about 26.90% of the portfolio. Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Avista Corp (AVA - Free Report) accounts for about 2.35% of the fund's total assets, followed by B&g Foods Inc (BGS - Free Report) and Rent-A-Center Inc/tx .
Its top 10 holdings account for approximately 18.98% of DGRS's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. SmallCap Quality Dividend Growth ETF has added about 19.38% so far, and is up roughly 45.42% over the last 12 months (as of 11/01/2021). DGRS has traded between $32.71 and $48.44 in this past 52-week period.
The ETF has a beta of 1.19 and standard deviation of 32.50% for the trailing three-year period, making it a medium risk choice in the space. With about 215 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $21.09 billion in assets, Vanguard Dividend Appreciation ETF has $64.99 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 Blend.
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 Quality Dividend Growth ETF (DGRS) a Strong ETF Right Now?
The WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) was launched on 07/25/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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
Managed by Wisdomtree, DGRS has amassed assets over $206.87 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, DGRS seeks to match the performance of the WisdomTree U.S. SmallCap Quality Dividend Growth Index.
The WisdomTree U.S. SmallCap Quality Dividend Growth Index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying stocks with growth characteristics.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
It has a 12-month trailing dividend yield of 2.06%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Industrials sector - about 26.90% of the portfolio. Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Avista Corp (AVA - Free Report) accounts for about 2.35% of the fund's total assets, followed by B&g Foods Inc (BGS - Free Report) and Rent-A-Center Inc/tx .
Its top 10 holdings account for approximately 18.98% of DGRS's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. SmallCap Quality Dividend Growth ETF has added about 19.38% so far, and is up roughly 45.42% over the last 12 months (as of 11/01/2021). DGRS has traded between $32.71 and $48.44 in this past 52-week period.
The ETF has a beta of 1.19 and standard deviation of 32.50% for the trailing three-year period, making it a medium risk choice in the space. With about 215 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $21.09 billion in assets, Vanguard Dividend Appreciation ETF has $64.99 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 Blend.
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.