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Is WisdomTree U.S. MidCap Dividend ETF (DON) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. MidCap Dividend ETF (DON - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
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.
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
Managed by Wisdomtree, DON has amassed assets over $3.35 billion, making it one of the larger ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index.
The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for DON are 0.38%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.55%.
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.
Representing 23.50% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Consumer Discretionary round out the top three.
When you look at individual holdings, Evergy Inc (EVRG - Free Report) accounts for about 1.51% of the fund's total assets, followed by Cardinal Health Inc (CAH - Free Report) and Continental Resources Inc/ok .
DON's top 10 holdings account for about 10.89% of its total assets under management.
Performance and Risk
The ETF has lost about -0.22% and is down about -0.21% so far this year and in the past one year (as of 11/28/2022), respectively. DON has traded between $37.67 and $45.36 during this last 52-week period.
The ETF has a beta of 1.06 and standard deviation of 29.53% for the trailing three-year period, making it a medium risk choice in the space. With about 337 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell MidCap Value ETF (IWS - Free Report) tracks Russell MidCap Value Index and the Vanguard MidCap Value ETF (VOE - Free Report) tracks CRSP U.S. Mid Cap Value Index. IShares Russell MidCap Value ETF has $13.59 billion in assets, Vanguard MidCap Value ETF has $16.54 billion. IWS has an expense ratio of 0.23% and VOE 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 - Mid 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. MidCap Dividend ETF (DON) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree U.S. MidCap Dividend ETF (DON - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Mid Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
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.
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
Managed by Wisdomtree, DON has amassed assets over $3.35 billion, making it one of the larger ETFs in the Style Box - Mid Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index.
The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for DON are 0.38%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.55%.
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.
Representing 23.50% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Consumer Discretionary round out the top three.
When you look at individual holdings, Evergy Inc (EVRG - Free Report) accounts for about 1.51% of the fund's total assets, followed by Cardinal Health Inc (CAH - Free Report) and Continental Resources Inc/ok .
DON's top 10 holdings account for about 10.89% of its total assets under management.
Performance and Risk
The ETF has lost about -0.22% and is down about -0.21% so far this year and in the past one year (as of 11/28/2022), respectively. DON has traded between $37.67 and $45.36 during this last 52-week period.
The ETF has a beta of 1.06 and standard deviation of 29.53% for the trailing three-year period, making it a medium risk choice in the space. With about 337 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell MidCap Value ETF (IWS - Free Report) tracks Russell MidCap Value Index and the Vanguard MidCap Value ETF (VOE - Free Report) tracks CRSP U.S. Mid Cap Value Index. IShares Russell MidCap Value ETF has $13.59 billion in assets, Vanguard MidCap Value ETF has $16.54 billion. IWS has an expense ratio of 0.23% and VOE 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 - Mid 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.