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Is WisdomTree U.S. Total Dividend ETF (DTD) a Strong ETF Right Now?
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Launched on 06/16/2006, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.01 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. DTD is managed by Wisdomtree. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. Dividend Index.
The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity 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.
Operating expenses on an annual basis are 0.28% for DTD, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.36%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector - about 15.40% of the portfolio. Healthcare and Financials round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.95% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 25.42% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Total Dividend ETF has lost about -6.61% so far, and is up about 4.17% over the last 12 months (as of 05/12/2022). DTD has traded between $57.80 and $65.68 in this past 52-week period.
The ETF has a beta of 0.92 and standard deviation of 22.32% for the trailing three-year period, making it a medium risk choice in the space. With about 644 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $52.13 billion in assets, Vanguard Value ETF has $95.85 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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. Total Dividend ETF (DTD) a Strong ETF Right Now?
Launched on 06/16/2006, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.01 billion, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. DTD is managed by Wisdomtree. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. Dividend Index.
The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity 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.
Operating expenses on an annual basis are 0.28% for DTD, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.36%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Consumer Staples sector - about 15.40% of the portfolio. Healthcare and Financials round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.95% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 25.42% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Total Dividend ETF has lost about -6.61% so far, and is up about 4.17% over the last 12 months (as of 05/12/2022). DTD has traded between $57.80 and $65.68 in this past 52-week period.
The ETF has a beta of 0.92 and standard deviation of 22.32% for the trailing three-year period, making it a medium risk choice in the space. With about 644 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $52.13 billion in assets, Vanguard Value ETF has $95.85 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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.