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Is WisdomTree Europe SmallCap Dividend ETF (DFE) a Strong ETF Right Now?
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The WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) was launched on 06/16/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the European Equity ETFs 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
DFE is managed by Wisdomtree, and this fund has amassed over $264.22 million, which makes it one of the average sized ETFs in the European Equity ETFs. Before fees and expenses, DFE seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.58% for DFE, making it on par with most peer products in the space.
DFE's 12-month trailing dividend yield is 3.10%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Postnl Nv (PNL) accounts for about 3.77% of the fund's total assets, followed by Banca Farmafactoring Spa (BFF) and Diversified Energy Co (DEC).
Its top 10 holdings account for approximately 15.8% of DFE's total assets under management.
Performance and Risk
The ETF has lost about -15.94% so far this year and is down about -12.80% in the last one year (as of 04/27/2022). In the past 52-week period, it has traded between $58.39 and $79.11.
The ETF has a beta of 1.19 and standard deviation of 24.18% for the trailing three-year period, making it a medium risk choice in the space. With about 309 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 $9.46 billion in assets, Vanguard FTSE Europe ETF has $18.82 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?
The WisdomTree Europe SmallCap Dividend ETF (DFE - Free Report) was launched on 06/16/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the European Equity ETFs 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
DFE is managed by Wisdomtree, and this fund has amassed over $264.22 million, which makes it one of the average sized ETFs in the European Equity ETFs. Before fees and expenses, DFE seeks to match the performance of the WisdomTree Europe SmallCap Dividend Index.
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.58% for DFE, making it on par with most peer products in the space.
DFE's 12-month trailing dividend yield is 3.10%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Postnl Nv (PNL) accounts for about 3.77% of the fund's total assets, followed by Banca Farmafactoring Spa (BFF) and Diversified Energy Co (DEC).
Its top 10 holdings account for approximately 15.8% of DFE's total assets under management.
Performance and Risk
The ETF has lost about -15.94% so far this year and is down about -12.80% in the last one year (as of 04/27/2022). In the past 52-week period, it has traded between $58.39 and $79.11.
The ETF has a beta of 1.19 and standard deviation of 24.18% for the trailing three-year period, making it a medium risk choice in the space. With about 309 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 $9.46 billion in assets, Vanguard FTSE Europe ETF has $18.82 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.