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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) made its debut on 05/22/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value 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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. DGRW has been able to amass assets over $6.26 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. DGRW, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.28% for DGRW, making it on par with most peer products in the space.
DGRW's 12-month trailing dividend yield is 1.97%.
Sector Exposure and Top Holdings
ETFs offer 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.
Representing 22.30% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Staples and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.09% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Microsoft Corp (MSFT - Free Report) .
DGRW's top 10 holdings account for about 36.22% of its total assets under management.
Performance and Risk
The ETF has lost about -8.67% and was up about 1.73% so far this year and in the past one year (as of 05/11/2022), respectively. DGRW has traded between $58.14 and $66.20 during this last 52-week period.
DGRW has a beta of 0.90 and standard deviation of 21.58% for the trailing three-year period, which makes the fund 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 $22.48 billion in assets, Vanguard Dividend Appreciation ETF has $61.44 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) made its debut on 05/22/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value 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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. DGRW has been able to amass assets over $6.26 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. DGRW, before fees and expenses, seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index.
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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.28% for DGRW, making it on par with most peer products in the space.
DGRW's 12-month trailing dividend yield is 1.97%.
Sector Exposure and Top Holdings
ETFs offer 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.
Representing 22.30% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Consumer Staples and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.09% of the fund's total assets, followed by Johnson & Johnson (JNJ - Free Report) and Microsoft Corp (MSFT - Free Report) .
DGRW's top 10 holdings account for about 36.22% of its total assets under management.
Performance and Risk
The ETF has lost about -8.67% and was up about 1.73% so far this year and in the past one year (as of 05/11/2022), respectively. DGRW has traded between $58.14 and $66.20 during this last 52-week period.
DGRW has a beta of 0.90 and standard deviation of 21.58% for the trailing three-year period, which makes the fund 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 $22.48 billion in assets, Vanguard Dividend Appreciation ETF has $61.44 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.