Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the WisdomTree U.S. Dividend exFinancials ETF is a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $552.75 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
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.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.84%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Consumer Staples sector--about 15.20% of the portfolio. Utilities and Telecom round out the top three.
Looking at individual holdings, Altria Group Inc (
MO Quick Quote MO - Free Report) accounts for about 3.57% of total assets, followed by Lumen Technologies Inc ( LUMN Quick Quote LUMN - Free Report) and Philip Morris International Inc ( PM Quick Quote PM - Free Report) .
The top 10 holdings account for about 21.16% of total assets under management.
Performance and Risk
DTN seeks to match the performance of the WisdomTree U.S. Dividend ex-Financials Index before fees and expenses. The WisdomTree U.S. Dividend ex-Financials Index measures the performance of high dividend-yielding stocks outside the financial sector.
The ETF has added about 20.61% so far this year and was up about 30.12% in the last one year (as of 10/21/2021). In the past 52-week period, it has traded between $72.77 and $100.85.
The ETF has a beta of 1.04 and standard deviation of 23.87% for the trailing three-year period, making it a medium risk choice in the space. With about 96 holdings, it effectively diversifies company-specific risk.
WisdomTree U.S. Dividend exFinancials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DTN is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (
IWD Quick Quote IWD - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $56.47 billion in assets, Vanguard Value ETF has $87.38 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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.