Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the WisdomTree International Hedged Quality Dividend Growth ETF (
IHDG Quick Quote IHDG - Free Report) is a smart beta exchange traded fund launched on 05/07/2014. 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $1.11 billion, which makes it one of the larger ETFs in the Broad Developed World ETFs. IHDG, before fees and expenses, seeks to match the performance of the WisdomTree International Hedged Quality Dividend Growth Index.
The WisdomTree International Hedged Quality Dividend Growth Index is designed to provide exposure to the developed market companies while at the same time neutralizing exposure to fluctuations between the value of foreign currencies and the U.S. dollar.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.58% for IHDG, making it on par with most peer products in the space.
IHDG's 12-month trailing dividend yield is 4.63%.
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.
Looking at individual holdings, Anglo American Plc (
AAL Quick Quote AAL - Free Report) accounts for about 5.86% of total assets, followed by Bhp Group Ltd ( BHP Quick Quote BHP - Free Report) and Rio Tinto Plc ( RIO Quick Quote RIO - Free Report) .
The top 10 holdings account for about 42.21% of total assets under management.
Performance and Risk
So far this year, IHDG has lost about -15.66%, and is down about -10.71% in the last one year (as of 06/30/2022). During this past 52-week period, the fund has traded between $37.68 and $46.44.
The ETF has a beta of 0.70 and standard deviation of 20.39% for the trailing three-year period, making it a medium risk choice in the space. With about 241 holdings, it effectively diversifies company-specific risk.
WisdomTree International Hedged Quality Dividend Growth 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 Core Dividend Growth ETF (
DGRO Quick Quote DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF ( VIG Quick Quote VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $21.90 billion in assets, Vanguard Dividend Appreciation ETF has $59.80 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 Broad Developed World ETFs.
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.