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Is WisdomTree U.S. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?

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Launched on 06/16/2006, the WisdomTree U.S. LargeCap Dividend ETF (DLN - 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?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

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.

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.

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

DLN is managed by Wisdomtree, and this fund has amassed over $3.37 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, DLN seeks to match the performance of the WisdomTree U.S. LargeCap Dividend Index.

The WisdomTree U.S. LargeCap Dividend Index is a fundamentally weighted index that measures the performance of the large-capitalization segment of the U.S. dividend-paying market.

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 DLN, making it on par with most peer products in the space.

DLN's 12-month trailing dividend yield is 2.22%.

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.

This ETF has heaviest allocation in the Healthcare sector - about 17.60% of the portfolio. Consumer Staples and Information Technology round out the top three.

Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 4.42% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Exxon Mobil Corp (XOM - Free Report) .

DLN's top 10 holdings account for about 28.55% of its total assets under management.

Performance and Risk

So far this year, DLN has lost about -5.55%, and it's up approximately 5.83% in the last one year (as of 05/24/2022). During this past 52-week period, the fund has traded between $58.70 and $66.91.

The fund has a beta of 0.90 and standard deviation of 22.60% for the trailing three-year period, which makes DLN a medium risk choice in this particular space. With about 301 holdings, it effectively diversifies company-specific risk.


WisdomTree U.S. LargeCap Dividend 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 Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.66 billion in assets, Vanguard Value ETF has $97.50 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.

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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