If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the WisdomTree U.S. High Dividend ETF (
DHS Quick Quote DHS - Free Report) , a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $1.13 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.33%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Healthcare sector--about 20.40% of the portfolio. Energy and Consumer Staples round out the top three.
Looking at individual holdings, Exxon Mobil Corp (
XOM Quick Quote XOM - Free Report) accounts for about 6.53% of total assets, followed by Chevron Corp ( CVX Quick Quote CVX - Free Report) and Philip Morris International Inc ( PM Quick Quote PM - Free Report) .
The top 10 holdings account for about 44.71% of total assets under management.
Performance and Risk
DHS seeks to match the performance of the WisdomTree U.S. High Dividend Index before fees and expenses. The WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index.
The ETF has gained about 2.01% so far this year and was up about 10.23% in the last one year (as of 06/29/2022). In the past 52-week period, it has traded between $76.78 and $91.19.
The ETF has a beta of 0.80 and standard deviation of 22.47% for the trailing three-year period, making it a medium risk choice in the space. With about 315 holdings, it effectively diversifies company-specific risk.
WisdomTree U.S. High Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DHS is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (
IWD Quick Quote IWD - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $51.50 billion in assets, Vanguard Value ETF has $94.22 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.