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Is WisdomTree Europe SmallCap Dividend ETF (DFE) a Strong ETF Right Now?
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The WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the European Equity ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Managed by Wisdomtree, DFE has amassed assets over $202.45 million, making it one of the average sized ETFs in the European Equity ETFs. This particular fund seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index before fees and expenses.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.58% for DFE, making it on par with most peer products in the space.
DFE's 12-month trailing dividend yield is 5.45%.
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.
Looking at individual holdings, Ssab Ab (SSABA) accounts for about 2.54% of total assets, followed by D/s Norden (DNORD) and Sydbank A/s (SYDB).
The top 10 holdings account for about 13.73% of total assets under management.
Performance and Risk
The ETF has added roughly 7.24% and is down about -17.67% so far this year and in the past one year (as of 01/13/2023), respectively. DFE has traded between $44.46 and $73.96 during this last 52-week period.
The fund has a beta of 1.15 and standard deviation of 26.93% for the trailing three-year period, which makes DFE a medium risk choice in this particular space. With about 298 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe SmallCap Dividend ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI Eurozone ETF (EZU - Free Report) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. IShares MSCI Eurozone ETF has $6.64 billion in assets, Vanguard FTSE Europe ETF has $16.27 billion. EZU has an expense ratio of 0.50% 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?
The WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the European Equity ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Managed by Wisdomtree, DFE has amassed assets over $202.45 million, making it one of the average sized ETFs in the European Equity ETFs. This particular fund seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index before fees and expenses.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.58% for DFE, making it on par with most peer products in the space.
DFE's 12-month trailing dividend yield is 5.45%.
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.
Looking at individual holdings, Ssab Ab (SSABA) accounts for about 2.54% of total assets, followed by D/s Norden (DNORD) and Sydbank A/s (SYDB).
The top 10 holdings account for about 13.73% of total assets under management.
Performance and Risk
The ETF has added roughly 7.24% and is down about -17.67% so far this year and in the past one year (as of 01/13/2023), respectively. DFE has traded between $44.46 and $73.96 during this last 52-week period.
The fund has a beta of 1.15 and standard deviation of 26.93% for the trailing three-year period, which makes DFE a medium risk choice in this particular space. With about 298 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe SmallCap Dividend ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI Eurozone ETF (EZU - Free Report) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. IShares MSCI Eurozone ETF has $6.64 billion in assets, Vanguard FTSE Europe ETF has $16.27 billion. EZU has an expense ratio of 0.50% 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.