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Is WisdomTree Europe SmallCap Dividend ETF (DFE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) debuted on 06/16/2006, and offers broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
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.
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.
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
DFE is managed by Wisdomtree, and this fund has amassed over $302.50 million, which makes it one of the average sized ETFs in the European Equity ETFs. This particular fund seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index before fees and expenses.
The WisdomTree Europe SmallCap Dividend Index is a fundamentally weighted index that measures the performance of the small-capitalization segment of the European dividend-paying 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 0.58% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.74%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Postnl Nv (PNL) accounts for about 3.44% of total assets, followed by Ferrexpo Plc (FXPO) and Banca Farmafactoring Spa (BFF).
DFE's top 10 holdings account for about 16.44% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Europe SmallCap Dividend ETF has lost about -7.37% so far, and was up about 4.49% over the last 12 months (as of 02/21/2022). DFE has traded between $67.43 and $79.11 in this past 52-week period.
The fund has a beta of 1.18 and standard deviation of 23.13% for the trailing three-year period, which makes DFE a medium risk choice in this particular space. With about 310 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the European Equity ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) tracks MORNINGSTAR DEV EUROPE TARGET MKT EXP ID and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. JPMorgan BetaBuilders Europe ETF has $9.63 billion in assets, Vanguard FTSE Europe ETF has $21.64 billion. BBEU has an expense ratio of 0.09% and VGK charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity 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 Europe SmallCap Dividend ETF (DFE) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) debuted on 06/16/2006, and offers broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
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.
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.
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
DFE is managed by Wisdomtree, and this fund has amassed over $302.50 million, which makes it one of the average sized ETFs in the European Equity ETFs. This particular fund seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index before fees and expenses.
The WisdomTree Europe SmallCap Dividend Index is a fundamentally weighted index that measures the performance of the small-capitalization segment of the European dividend-paying 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 0.58% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.74%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Postnl Nv (PNL) accounts for about 3.44% of total assets, followed by Ferrexpo Plc (FXPO) and Banca Farmafactoring Spa (BFF).
DFE's top 10 holdings account for about 16.44% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Europe SmallCap Dividend ETF has lost about -7.37% so far, and was up about 4.49% over the last 12 months (as of 02/21/2022). DFE has traded between $67.43 and $79.11 in this past 52-week period.
The fund has a beta of 1.18 and standard deviation of 23.13% for the trailing three-year period, which makes DFE a medium risk choice in this particular space. With about 310 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the European Equity ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) tracks MORNINGSTAR DEV EUROPE TARGET MKT EXP ID and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. JPMorgan BetaBuilders Europe ETF has $9.63 billion in assets, Vanguard FTSE Europe ETF has $21.64 billion. BBEU has an expense ratio of 0.09% and VGK charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity 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.