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Is WisdomTree U.S. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
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The WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) was launched on 06/16/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Wisdomtree, DLN has amassed assets over $3.78 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. LargeCap Dividend Index.
The WisdomTree U.S. LargeCap Dividend Index is a fundamentally weighted index that measures the performance of the large-capitalization segment of the U.S. dividend-paying market.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
DLN's 12-month trailing dividend yield is 2.48%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
DLN's heaviest allocation is in the Information Technology sector, which is about 17.50% of the portfolio. Its Healthcare and Financials round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 3.87% of total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 25.03% of DLN's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. LargeCap Dividend ETF has added about 1.63% so far, and is down about -2.36% over the last 12 months (as of 02/10/2023). DLN has traded between $55.26 and $66.91 in this past 52-week period.
DLN has a beta of 0.89 and standard deviation of 23.68% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 302 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap 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 $52.85 billion in assets, Vanguard Value ETF has $103.37 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. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
The WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) was launched on 06/16/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Wisdomtree, DLN has amassed assets over $3.78 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. LargeCap Dividend Index.
The WisdomTree U.S. LargeCap Dividend Index is a fundamentally weighted index that measures the performance of the large-capitalization segment of the U.S. dividend-paying market.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
DLN's 12-month trailing dividend yield is 2.48%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
DLN's heaviest allocation is in the Information Technology sector, which is about 17.50% of the portfolio. Its Healthcare and Financials round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 3.87% of total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 25.03% of DLN's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. LargeCap Dividend ETF has added about 1.63% so far, and is down about -2.36% over the last 12 months (as of 02/10/2023). DLN has traded between $55.26 and $66.91 in this past 52-week period.
DLN has a beta of 0.89 and standard deviation of 23.68% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 302 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap 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 $52.85 billion in assets, Vanguard Value ETF has $103.37 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.