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Is WisdomTree U.S. LargeCap ETF (EPS) a Strong ETF Right Now?
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The WisdomTree U.S. LargeCap ETF (EPS - Free Report) was launched on 02/23/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Managed by Wisdomtree, EPS has amassed assets over $741.67 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. EPS, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Earnings 500 Index.
The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-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 0.08% for EPS, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.74%.
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.
For EPS, it has heaviest allocation in the Information Technology sector --about 23.60% of the portfolio --while Financials and Healthcare round out the top three.
Looking at individual holdings, Alphabet Inc-Cl A (GOOGL - Free Report) accounts for about 6.08% of total assets, followed by Apple Inc (AAPL - Free Report) and Meta Platformsinc. Cl A .
Its top 10 holdings account for approximately 32.33% of EPS's total assets under management.
Performance and Risk
So far this year, EPS has lost about -1.01%, and is up about 21.83% in the last one year (as of 01/08/2024). During this past 52-week period, the fund has traded between $41.41 and $50.34.
The ETF has a beta of 1 and standard deviation of 16.65% for the trailing three-year period, making it a medium risk choice in the space. With about 506 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $54.50 billion in assets, Vanguard Value ETF has $106.19 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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. LargeCap ETF (EPS) a Strong ETF Right Now?
The WisdomTree U.S. LargeCap ETF (EPS - Free Report) was launched on 02/23/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Managed by Wisdomtree, EPS has amassed assets over $741.67 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. EPS, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Earnings 500 Index.
The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-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 0.08% for EPS, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.74%.
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.
For EPS, it has heaviest allocation in the Information Technology sector --about 23.60% of the portfolio --while Financials and Healthcare round out the top three.
Looking at individual holdings, Alphabet Inc-Cl A (GOOGL - Free Report) accounts for about 6.08% of total assets, followed by Apple Inc (AAPL - Free Report) and Meta Platformsinc. Cl A .
Its top 10 holdings account for approximately 32.33% of EPS's total assets under management.
Performance and Risk
So far this year, EPS has lost about -1.01%, and is up about 21.83% in the last one year (as of 01/08/2024). During this past 52-week period, the fund has traded between $41.41 and $50.34.
The ETF has a beta of 1 and standard deviation of 16.65% for the trailing three-year period, making it a medium risk choice in the space. With about 506 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $54.50 billion in assets, Vanguard Value ETF has $106.19 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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.