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Should WisdomTree U.S. Total Dividend ETF (DTD) Be on Your Investing Radar?

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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. Total Dividend ETF (DTD - Free Report) , a passively managed exchange traded fund launched on 06/16/2006.

The fund is sponsored by Wisdomtree. It has amassed assets over $969.34 million, 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. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.28%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.81%.

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 16% of the portfolio. Financials and Consumer Staples round out the top three.

Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.79% of total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Apple Inc (AAPL - Free Report) .

The top 10 holdings account for about 24.15% of total assets under management.

Performance and Risk

DTD seeks to match the performance of the WisdomTree U.S. Dividend Index before fees and expenses. The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity market.

The ETF has lost about -13.76% so far this year and is down about -6.18% in the last one year (as of 09/28/2022). In the past 52-week period, it has traded between $54.92 and $65.68.

The ETF has a beta of 0.90 and standard deviation of 22.89% for the trailing three-year period, making it a medium risk choice in the space. With about 639 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree U.S. Total 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, DTD is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $47.39 billion in assets, Vanguard Value ETF has $90.16 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

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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