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Is WisdomTree U.S. Total Dividend ETF (DTD) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
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
Managed by Wisdomtree, DTD has amassed assets over $1.10 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund 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.
Cost & Other Expenses
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.28% for DTD, making it on par with most peer products in the space.
DTD's 12-month trailing dividend yield is 2.48%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For DTD, it has heaviest allocation in the Healthcare sector --about 16% of the portfolio --while Financials and Consumer Staples round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.79% of the fund's 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
The ETF has lost about -3.34% and is down about -0.03% so far this year and in the past one year (as of 11/17/2022), respectively. DTD has traded between $54.26 and $65.68 during this last 52-week period.
The fund has a beta of 0.92 and standard deviation of 23.37% for the trailing three-year period, which makes DTD a medium risk choice in this particular space. With about 639 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $54.47 billion in assets, Vanguard Value ETF has $104.38 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. Total Dividend ETF (DTD) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
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
Managed by Wisdomtree, DTD has amassed assets over $1.10 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund 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.
Cost & Other Expenses
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 cousins, other things remaining the same.
Operating expenses on an annual basis are 0.28% for DTD, making it on par with most peer products in the space.
DTD's 12-month trailing dividend yield is 2.48%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For DTD, it has heaviest allocation in the Healthcare sector --about 16% of the portfolio --while Financials and Consumer Staples round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.79% of the fund's 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
The ETF has lost about -3.34% and is down about -0.03% so far this year and in the past one year (as of 11/17/2022), respectively. DTD has traded between $54.26 and $65.68 during this last 52-week period.
The fund has a beta of 0.92 and standard deviation of 23.37% for the trailing three-year period, which makes DTD a medium risk choice in this particular space. With about 639 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $54.47 billion in assets, Vanguard Value ETF has $104.38 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.