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Is WisdomTree U.S. High Dividend ETF (DHS) a Strong ETF Right Now?
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The WisdomTree U.S. High Dividend ETF (DHS - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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
The fund is managed by Wisdomtree, and has been able to amass over $1.18 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. High Dividend Index.
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.
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.
Annual operating expenses for DHS are 0.38%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.42%.
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.
This ETF has heaviest allocation in the Healthcare sector - about 20.30% of the portfolio. Energy and Consumer Staples round out the top three.
Taking into account individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 7.44% of the fund's total assets, followed by Chevron Corp (CVX - Free Report) and Pfizer Inc (PFE - Free Report) .
DHS's top 10 holdings account for about 46.74% of its total assets under management.
Performance and Risk
The ETF has added about 2.21% so far this year and is up about 6.79% in the last one year (as of 09/02/2022). In the past 52-week period, it has traded between $76.78 and $91.19.
The fund has a beta of 0.79 and standard deviation of 22.43% for the trailing three-year period, which makes DHS a medium risk choice in this particular space. With about 314 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. High Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $51.71 billion in assets, Vanguard Value ETF has $97.56 billion. IWD has an expense ratio of 0.18% 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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Is WisdomTree U.S. High Dividend ETF (DHS) a Strong ETF Right Now?
The WisdomTree U.S. High Dividend ETF (DHS - Free Report) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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
The fund is managed by Wisdomtree, and has been able to amass over $1.18 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree U.S. High Dividend Index.
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.
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.
Annual operating expenses for DHS are 0.38%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.42%.
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.
This ETF has heaviest allocation in the Healthcare sector - about 20.30% of the portfolio. Energy and Consumer Staples round out the top three.
Taking into account individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 7.44% of the fund's total assets, followed by Chevron Corp (CVX - Free Report) and Pfizer Inc (PFE - Free Report) .
DHS's top 10 holdings account for about 46.74% of its total assets under management.
Performance and Risk
The ETF has added about 2.21% so far this year and is up about 6.79% in the last one year (as of 09/02/2022). In the past 52-week period, it has traded between $76.78 and $91.19.
The fund has a beta of 0.79 and standard deviation of 22.43% for the trailing three-year period, which makes DHS a medium risk choice in this particular space. With about 314 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. High Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $51.71 billion in assets, Vanguard Value ETF has $97.56 billion. IWD has an expense ratio of 0.18% 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.