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Should WisdomTree U.S. MidCap Dividend ETF (DON) Be on Your Investing Radar?
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The WisdomTree U.S. MidCap Dividend ETF (DON - Free Report) was launched on 06/16/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Wisdomtree. It has amassed assets over $2.92 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks 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.
Costs
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 counterparts, other things remaining the same.
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 2.60%.
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 to the Financials sector--about 23.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Evergy Inc (EVRG - Free Report) accounts for about 1.28% of total assets, followed by Fidelity National Financial Inc (FNF - Free Report) and Omnicom Group Inc (OMC - Free Report) .
The top 10 holdings account for about 10.84% of total assets under management.
Performance and Risk
DON seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index before fees and expenses. The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.
The ETF has lost about -11.10% so far this year and is down about -4.79% in the last one year (as of 07/06/2022). In the past 52-week period, it has traded between $38.16 and $45.36.
The ETF has a beta of 1.07 and standard deviation of 28.85% for the trailing three-year period, making it a medium risk choice in the space. With about 343 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap Dividend ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DON is an excellent option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell MidCap Value ETF (IWS - Free Report) and the Vanguard MidCap Value ETF (VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $12.50 billion in assets, Vanguard MidCap Value ETF has $14.90 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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.
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Should WisdomTree U.S. MidCap Dividend ETF (DON) Be on Your Investing Radar?
The WisdomTree U.S. MidCap Dividend ETF (DON - Free Report) was launched on 06/16/2006, and is a passively managed exchange traded fund designed to offer broad exposure to the Mid Cap Value segment of the US equity market.
The fund is sponsored by Wisdomtree. It has amassed assets over $2.92 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks 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.
Costs
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 counterparts, other things remaining the same.
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 2.60%.
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 to the Financials sector--about 23.30% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Evergy Inc (EVRG - Free Report) accounts for about 1.28% of total assets, followed by Fidelity National Financial Inc (FNF - Free Report) and Omnicom Group Inc (OMC - Free Report) .
The top 10 holdings account for about 10.84% of total assets under management.
Performance and Risk
DON seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index before fees and expenses. The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.
The ETF has lost about -11.10% so far this year and is down about -4.79% in the last one year (as of 07/06/2022). In the past 52-week period, it has traded between $38.16 and $45.36.
The ETF has a beta of 1.07 and standard deviation of 28.85% for the trailing three-year period, making it a medium risk choice in the space. With about 343 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap Dividend ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DON is an excellent option for investors seeking exposure to the Style Box - Mid Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell MidCap Value ETF (IWS - Free Report) and the Vanguard MidCap Value ETF (VOE - Free Report) track a similar index. While iShares Russell MidCap Value ETF has $12.50 billion in assets, Vanguard MidCap Value ETF has $14.90 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
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.