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Is WisdomTree U.S. SmallCap ETF (EES) a Strong ETF Right Now?
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The WisdomTree U.S. SmallCap ETF (EES - Free Report) made its debut on 02/23/2007, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small 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, EES has amassed assets over $594.17 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index.
The WisdomTree U.S. SmallCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the small-capitalization segment of the U.S. Stock Market.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.38% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.38%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 22.60% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Financials and Industrials round out the top three.
Looking at individual holdings, Mdc Holdings Inc accounts for about 0.92% of total assets, followed by Tri Pointe Group Inc (TPH - Free Report) and Genworth Financial Inc (GNW - Free Report) .
EES's top 10 holdings account for about 6.85% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. SmallCap ETF return is roughly 8.96% so far, and is up about 12.53% over the last 12 months (as of 07/13/2023). EES has traded between $39.17 and $49.11 in this past 52-week period.
The fund has a beta of 1.26 and standard deviation of 23.26% for the trailing three-year period, which makes EES a medium risk choice in this particular space. With about 912 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.60 billion in assets, Vanguard Small-Cap Value ETF has $25.38 billion. IWN has an expense ratio of 0.23% and VBR 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 - Small 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. SmallCap ETF (EES) a Strong ETF Right Now?
The WisdomTree U.S. SmallCap ETF (EES - Free Report) made its debut on 02/23/2007, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small 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, EES has amassed assets over $594.17 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index.
The WisdomTree U.S. SmallCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the small-capitalization segment of the U.S. Stock Market.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.38% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.38%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 22.60% of the portfolio, the fund has heaviest allocation to the Consumer Discretionary sector; Financials and Industrials round out the top three.
Looking at individual holdings, Mdc Holdings Inc accounts for about 0.92% of total assets, followed by Tri Pointe Group Inc (TPH - Free Report) and Genworth Financial Inc (GNW - Free Report) .
EES's top 10 holdings account for about 6.85% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. SmallCap ETF return is roughly 8.96% so far, and is up about 12.53% over the last 12 months (as of 07/13/2023). EES has traded between $39.17 and $49.11 in this past 52-week period.
The fund has a beta of 1.26 and standard deviation of 23.26% for the trailing three-year period, which makes EES a medium risk choice in this particular space. With about 912 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.60 billion in assets, Vanguard Small-Cap Value ETF has $25.38 billion. IWN has an expense ratio of 0.23% and VBR 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 - Small 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.