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Is WisdomTree U.S. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?
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The WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) was launched on 05/22/2013, 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
DGRW is managed by Wisdomtree, and this fund has amassed over $6.68 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. DGRW seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index before fees and expenses.
The WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.28%.
The fund has a 12-month trailing dividend yield of 1.89%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
DGRW's heaviest allocation is in the Information Technology sector, which is about 27.50% of the portfolio. Its Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.19% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 36.27% of DGRW's total assets under management.
Performance and Risk
So far this year, DGRW has lost about -7.03%, and is up roughly 13.20% in the last one year (as of 03/10/2022). During this past 52-week period, the fund has traded between $55.62 and $66.20.
The ETF has a beta of 0.93 and standard deviation of 21.23% for the trailing three-year period, making it a medium risk choice in the space. With about 299 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Quality Dividend Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $22.47 billion in assets, Vanguard Dividend Appreciation ETF has $62.73 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 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. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?
The WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) was launched on 05/22/2013, 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
DGRW is managed by Wisdomtree, and this fund has amassed over $6.68 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. DGRW seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index before fees and expenses.
The WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.28%.
The fund has a 12-month trailing dividend yield of 1.89%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
DGRW's heaviest allocation is in the Information Technology sector, which is about 27.50% of the portfolio. Its Healthcare and Consumer Staples round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.19% of total assets, followed by Johnson & Johnson (JNJ - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 36.27% of DGRW's total assets under management.
Performance and Risk
So far this year, DGRW has lost about -7.03%, and is up roughly 13.20% in the last one year (as of 03/10/2022). During this past 52-week period, the fund has traded between $55.62 and $66.20.
The ETF has a beta of 0.93 and standard deviation of 21.23% for the trailing three-year period, making it a medium risk choice in the space. With about 299 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Quality Dividend Growth ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $22.47 billion in assets, Vanguard Dividend Appreciation ETF has $62.73 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 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.