Launched on 06/16/2006, the WisdomTree U.S. High Dividend ETF (
DHS Quick Quote DHS - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. DHS has been able to amass assets over $820.08 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. High Dividend Index.
The WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for DHS are 0.38%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.88%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For DHS, it has heaviest allocation in the Consumer Staples sector --about 20.10% of the portfolio --while Financials and Information Technology round out the top three.
When you look at individual holdings, Philip Morris International Inc (
PM Quick Quote PM - Free Report) accounts for about 5.72% of the fund's total assets, followed by Altria Group Inc ( MO Quick Quote MO - Free Report) and Abbvie Inc ( ABBV Quick Quote ABBV - Free Report) .
The top 10 holdings account for about 45.04% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. High Dividend ETF return is roughly 18.83% so far, and it's up approximately 29.95% over the last 12 months (as of 10/21/2021). DHS has traded between $60.36 and $81.05 in this past 52-week period.
DHS has a beta of 0.91 and standard deviation of 22% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 318 holdings, it effectively diversifies company-specific risk.
WisdomTree U.S. High Dividend 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 Quick Quote IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. 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%.
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.
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.