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Should WisdomTree U.S. Total Dividend ETF (DTD) Be on Your Investing Radar?

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The WisdomTree U.S. Total Dividend ETF (DTD - Free Report) was launched on 06/16/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Wisdomtree. It has amassed assets over $1.06 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

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 counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.28%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.42%.

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.

This ETF has heaviest allocation to the Healthcare sector--about 16.30% of the portfolio. Consumer Staples and Financials round out the top three.

Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.78% of total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Johnson & Johnson (JNJ - Free Report) .

The top 10 holdings account for about 26.48% of total assets under management.

Performance and Risk

DTD seeks to match the performance of the WisdomTree U.S. Dividend Index before fees and expenses. The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity market.

The ETF has lost about -6.52% so far this year and was up about 1.93% in the last one year (as of 07/28/2022). In the past 52-week period, it has traded between $56.16 and $65.68.

The ETF has a beta of 0.92 and standard deviation of 22.83% for the trailing three-year period, making it a medium risk choice in the space. With about 641 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree U.S. Total Dividend ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DTD is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $52.62 billion in assets, Vanguard Value ETF has $96.65 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

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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