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Is WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) debuted on 07/25/2013, and offers 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $217.62 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Blend. DGRS is managed by Wisdomtree. DGRS, before fees and expenses, 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
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 0.38% for DGRS, making it on par with most peer products in the space.
DGRS's 12-month trailing dividend yield is 2.74%.
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.
DGRS's heaviest allocation is in the Industrials sector, which is about 25.40% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Epr Properties (EPR - Free Report) accounts for about 2.22% of the fund's total assets, followed by Spire Inc (SR - Free Report) and Xerox Holdings Corp (XRX - Free Report) .
The top 10 holdings account for about 16.13% of total assets under management.
Performance and Risk
The ETF has lost about -10.44% so far this year and is down about -10.72% in the last one year (as of 11/18/2022). In the past 52-week period, it has traded between $35.95 and $48.34.
DGRS has a beta of 1.11 and standard deviation of 33.42% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 288 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 $24.10 billion in assets, Vanguard Dividend Appreciation ETF has $64.60 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?
A smart beta exchange traded fund, the WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) debuted on 07/25/2013, and offers 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $217.62 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Blend. DGRS is managed by Wisdomtree. DGRS, before fees and expenses, 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
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 0.38% for DGRS, making it on par with most peer products in the space.
DGRS's 12-month trailing dividend yield is 2.74%.
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.
DGRS's heaviest allocation is in the Industrials sector, which is about 25.40% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Epr Properties (EPR - Free Report) accounts for about 2.22% of the fund's total assets, followed by Spire Inc (SR - Free Report) and Xerox Holdings Corp (XRX - Free Report) .
The top 10 holdings account for about 16.13% of total assets under management.
Performance and Risk
The ETF has lost about -10.44% so far this year and is down about -10.72% in the last one year (as of 11/18/2022). In the past 52-week period, it has traded between $35.95 and $48.34.
DGRS has a beta of 1.11 and standard deviation of 33.42% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 288 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 $24.10 billion in assets, Vanguard Dividend Appreciation ETF has $64.60 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.