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Is WisdomTree International Equity ETF (DWM) a Strong ETF Right Now?

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The WisdomTree International Equity ETF (DWM - Free Report) was launched on 06/16/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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

The fund is managed by Wisdomtree, and has been able to amass over $624.91 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, DWM seeks to match the performance of the WisdomTree International Equity Index.

The WisdomTree International Equity Index is a fundamentally weighted Index that measures the performance of dividend-paying companies in the industrialized world, excluding Canada and the United States.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

Operating expenses on an annual basis are 0.48% 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 3.91%.

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.

When you look at individual holdings, Bhp Group Ltd (BHP - Free Report) accounts for about 3.37% of the fund's total assets, followed by Nestle Sa (NESN) and Rio Tinto Plc (RIO - Free Report) .

The top 10 holdings account for about 14.95% of total assets under management.

Performance and Risk

The ETF has lost about -6.31% and is down about -5.82% so far this year and in the past one year (as of 06/02/2022), respectively. DWM has traded between $47.69 and $56.66 during this last 52-week period.

DWM has a beta of 0.78 and standard deviation of 20.97% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 870 holdings, it effectively diversifies company-specific risk.


WisdomTree International Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares MSCI EAFE ETF (EFA - Free Report) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA - Free Report) tracks MSCI EAFE Investable Market Index. IShares MSCI EAFE ETF has $49.92 billion in assets, iShares Core MSCI EAFE ETF has $93.96 billion. EFA has an expense ratio of 0.32% and IEFA charges 0.07%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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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