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Is WisdomTree U.S. SmallCap ETF (EES) a Strong ETF Right Now?
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Launched on 02/23/2007, the WisdomTree U.S. SmallCap ETF (EES - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $640.76 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. EES is managed by Wisdomtree. Before fees and expenses, EES seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index.
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
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.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.10%.
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 Financials sector - about 27.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Navient Corp (NAVI - Free Report) accounts for about 1.36% of total assets, followed by Flagstar Bancorp Inc and United Natural Foods Inc (UNFI - Free Report) .
The top 10 holdings account for about 8.48% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. SmallCap ETF has gained about 28.28% so far, and is up roughly 27.60% over the last 12 months (as of 12/21/2021). EES has traded between $38.35 and $53.68 in this past 52-week period.
The fund has a beta of 1.35 and standard deviation of 31.43% for the trailing three-year period, which makes EES a medium risk choice in this particular space. With about 678 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 SmallCap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $15.12 billion in assets, Vanguard SmallCap Value ETF has $25.25 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?
Launched on 02/23/2007, the WisdomTree U.S. SmallCap ETF (EES - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $640.76 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. EES is managed by Wisdomtree. Before fees and expenses, EES seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index.
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
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.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.10%.
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 Financials sector - about 27.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Navient Corp (NAVI - Free Report) accounts for about 1.36% of total assets, followed by Flagstar Bancorp Inc and United Natural Foods Inc (UNFI - Free Report) .
The top 10 holdings account for about 8.48% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. SmallCap ETF has gained about 28.28% so far, and is up roughly 27.60% over the last 12 months (as of 12/21/2021). EES has traded between $38.35 and $53.68 in this past 52-week period.
The fund has a beta of 1.35 and standard deviation of 31.43% for the trailing three-year period, which makes EES a medium risk choice in this particular space. With about 678 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 SmallCap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $15.12 billion in assets, Vanguard SmallCap Value ETF has $25.25 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.