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Is WisdomTree Europe SmallCap Dividend ETF (DFE) a Strong ETF Right Now?
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Launched on 06/16/2006, the WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) is a smart beta exchange traded fund offering broad exposure to the European Equity ETFs 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.
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
DFE is managed by Wisdomtree, and this fund has amassed over $314.73 million, which makes it one of the average sized ETFs in the European Equity ETFs. Before fees and expenses, DFE seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index.
The WisdomTree Europe SmallCap Dividend Index is a fundamentally weighted index that measures the performance of the small-capitalization segment of the European dividend-paying market.
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.
Operating expenses on an annual basis are 0.58% for DFE, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.36%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Kardex Holding Ag (KARN) accounts for about 2.49% of the fund's total assets, followed by Ferrexpo Plc (FXPO) and Chemometec A/s (CHEMM).
DFE's top 10 holdings account for about 19.63% of its total assets under management.
Performance and Risk
So far this year, DFE return is roughly 12.61%, and it's up approximately 17.61% in the last one year (as of 12/22/2021). During this past 52-week period, the fund has traded between $63.78 and $79.11.
The ETF has a beta of 1.19 and standard deviation of 22.96% for the trailing three-year period, making it a medium risk choice in the space. With about 160 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the European Equity ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) tracks MORNINGSTAR DEV EUROPE TARGET MKT EXP ID and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. JPMorgan BetaBuilders Europe ETF has $9.37 billion in assets, Vanguard FTSE Europe ETF has $21.36 billion. BBEU has an expense ratio of 0.09% and VGK charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity ETFs.
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 Europe SmallCap Dividend ETF (DFE) a Strong ETF Right Now?
Launched on 06/16/2006, the WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) is a smart beta exchange traded fund offering broad exposure to the European Equity ETFs 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.
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
DFE is managed by Wisdomtree, and this fund has amassed over $314.73 million, which makes it one of the average sized ETFs in the European Equity ETFs. Before fees and expenses, DFE seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index.
The WisdomTree Europe SmallCap Dividend Index is a fundamentally weighted index that measures the performance of the small-capitalization segment of the European dividend-paying market.
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.
Operating expenses on an annual basis are 0.58% for DFE, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.36%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Kardex Holding Ag (KARN) accounts for about 2.49% of the fund's total assets, followed by Ferrexpo Plc (FXPO) and Chemometec A/s (CHEMM).
DFE's top 10 holdings account for about 19.63% of its total assets under management.
Performance and Risk
So far this year, DFE return is roughly 12.61%, and it's up approximately 17.61% in the last one year (as of 12/22/2021). During this past 52-week period, the fund has traded between $63.78 and $79.11.
The ETF has a beta of 1.19 and standard deviation of 22.96% for the trailing three-year period, making it a medium risk choice in the space. With about 160 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the European Equity ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) tracks MORNINGSTAR DEV EUROPE TARGET MKT EXP ID and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. JPMorgan BetaBuilders Europe ETF has $9.37 billion in assets, Vanguard FTSE Europe ETF has $21.36 billion. BBEU has an expense ratio of 0.09% and VGK charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity ETFs.
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.