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Is WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL) a Strong ETF Right Now?
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The WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the World ETFs 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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $362.32 million, this makes it one of the average sized ETFs in the World ETFs. DNL is managed by Wisdomtree. Before fees and expenses, DNL seeks to match the performance of the WisdomTree Global ex-U.S. Quality Dividend Growth Index.
The WisdomTree Global ex-U.S. Quality Dividend Growth Index is a fundamentally weighted index that measures the performance of dividend paying stocks with growth characteristics in the developed and emerging markets outside of the United States.
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 DNL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.66%.
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.
Taking into account individual holdings, Novo Nordisk A/s (NOVOB) accounts for about 7.02% of the fund's total assets, followed by British American Tobacco Plc and Fortescue Metals Group Ltd .
The top 10 holdings account for about 36.61% of total assets under management.
Performance and Risk
The ETF has added roughly 4.59% so far this year and is up about 21.51% in the last one year (as of 02/15/2021). In the past 52-week period, it has traded between $46.16 and $80.52.
The ETF has a beta of 0.85 and standard deviation of 22.24% for the trailing three-year period, making it a medium risk choice in the space. With about 245 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Global exU.S. Quality Dividend Growth ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $15.90 billion in assets, Vanguard Dividend Appreciation ETF has $54.26 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World 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 Global exU.S. Quality Dividend Growth ETF (DNL) a Strong ETF Right Now?
The WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the World ETFs 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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $362.32 million, this makes it one of the average sized ETFs in the World ETFs. DNL is managed by Wisdomtree. Before fees and expenses, DNL seeks to match the performance of the WisdomTree Global ex-U.S. Quality Dividend Growth Index.
The WisdomTree Global ex-U.S. Quality Dividend Growth Index is a fundamentally weighted index that measures the performance of dividend paying stocks with growth characteristics in the developed and emerging markets outside of the United States.
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 DNL, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.66%.
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.
Taking into account individual holdings, Novo Nordisk A/s (NOVOB) accounts for about 7.02% of the fund's total assets, followed by British American Tobacco Plc and Fortescue Metals Group Ltd .
The top 10 holdings account for about 36.61% of total assets under management.
Performance and Risk
The ETF has added roughly 4.59% so far this year and is up about 21.51% in the last one year (as of 02/15/2021). In the past 52-week period, it has traded between $46.16 and $80.52.
The ETF has a beta of 0.85 and standard deviation of 22.24% for the trailing three-year period, making it a medium risk choice in the space. With about 245 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Global exU.S. Quality Dividend Growth ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $15.90 billion in assets, Vanguard Dividend Appreciation ETF has $54.26 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World 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.