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Is WisdomTree U.S. SmallCap ETF (EES) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. SmallCap ETF (EES - Free Report) debuted on 02/23/2007, and offers broad exposure to the Style Box - Small Cap Value 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $596.90 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. EES seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index before fees and expenses.
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
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 0.38% for EES, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.45%.
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.
EES's heaviest allocation is in the Financials sector, which is about 22.70% of the portfolio. Its Consumer Discretionary 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 5.67% of its total assets under management.
Performance and Risk
So far this year, EES has added roughly 3.70%, and was up about 3.96% in the last one year (as of 09/14/2023). During this past 52-week period, the fund has traded between $39.17 and $49.11.
The fund has a beta of 1.27 and standard deviation of 22.83% 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 $10.79 billion in assets, Vanguard Small-Cap Value ETF has $24.55 billion. IWN has an expense ratio of 0.24% 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?
A smart beta exchange traded fund, the WisdomTree U.S. SmallCap ETF (EES - Free Report) debuted on 02/23/2007, and offers broad exposure to the Style Box - Small Cap Value 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $596.90 million, making it one of the average sized ETFs in the Style Box - Small Cap Value. EES seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index before fees and expenses.
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
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 0.38% for EES, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.45%.
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.
EES's heaviest allocation is in the Financials sector, which is about 22.70% of the portfolio. Its Consumer Discretionary 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 5.67% of its total assets under management.
Performance and Risk
So far this year, EES has added roughly 3.70%, and was up about 3.96% in the last one year (as of 09/14/2023). During this past 52-week period, the fund has traded between $39.17 and $49.11.
The fund has a beta of 1.27 and standard deviation of 22.83% 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 $10.79 billion in assets, Vanguard Small-Cap Value ETF has $24.55 billion. IWN has an expense ratio of 0.24% 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.