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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 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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
Managed by Wisdomtree, DHS has amassed assets over $1.25 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. DHS seeks to match the performance of the WisdomTree U.S. High Dividend Index before fees and expenses.
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 this ETF are 0.38%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.30%.
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 DHS, it has heaviest allocation in the Energy sector --about 19.90% of the portfolio --while Financials and Utilities round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 5.82% of total assets, followed by Abbvie Inc (ABBV - Free Report) and Chevron Corp (CVX - Free Report) .
DHS's top 10 holdings account for about 40.02% of its total assets under management.
Performance and Risk
So far this year, DHS has lost about -7.26%, and is down about -3.98% in the last one year (as of 05/11/2023). During this past 52-week period, the fund has traded between $75.81 and $90.88.
The ETF has a beta of 0.81 and standard deviation of 16.46% for the trailing three-year period, making it a medium risk choice in the space. With about 392 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 $49.27 billion in assets, Vanguard Value ETF has $100.12 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 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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
Managed by Wisdomtree, DHS has amassed assets over $1.25 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. DHS seeks to match the performance of the WisdomTree U.S. High Dividend Index before fees and expenses.
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 this ETF are 0.38%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.30%.
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 DHS, it has heaviest allocation in the Energy sector --about 19.90% of the portfolio --while Financials and Utilities round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 5.82% of total assets, followed by Abbvie Inc (ABBV - Free Report) and Chevron Corp (CVX - Free Report) .
DHS's top 10 holdings account for about 40.02% of its total assets under management.
Performance and Risk
So far this year, DHS has lost about -7.26%, and is down about -3.98% in the last one year (as of 05/11/2023). During this past 52-week period, the fund has traded between $75.81 and $90.88.
The ETF has a beta of 0.81 and standard deviation of 16.46% for the trailing three-year period, making it a medium risk choice in the space. With about 392 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 $49.27 billion in assets, Vanguard Value ETF has $100.12 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.