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Should WisdomTree U.S. MidCap Dividend ETF (DON) Be on Your Investing Radar?
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Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the WisdomTree U.S. MidCap Dividend ETF (DON - Free Report) is a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $3.26 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 23.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Packaging Corp Of America (PKG - Free Report) accounts for about 1.12% of total assets, followed by Chesapeake Energy Corp (CHK - Free Report) and Paramount Global - Class B (PARA - Free Report) .
The top 10 holdings account for about 9.38% of total assets under management.
Performance and Risk
DON seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index before fees and expenses. The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.
The ETF has gained about 4.13% so far this year and it's up approximately 4.67% in the last one year (as of 09/18/2023). In the past 52-week period, it has traded between $37.67 and $45.40.
The ETF has a beta of 1.08 and standard deviation of 19.59% for the trailing three-year period, making it a medium risk choice in the space. With about 346 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DON is a sufficient option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell Mid-Cap Value ETF (IWS - Free Report) and the Vanguard Mid-Cap Value ETF (VOE - Free Report) track a similar index. While iShares Russell Mid-Cap Value ETF has $12.51 billion in assets, Vanguard Mid-Cap Value ETF has $15.70 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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Should WisdomTree U.S. MidCap Dividend ETF (DON) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Value segment of the US equity market, the WisdomTree U.S. MidCap Dividend ETF (DON - Free Report) is a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $3.26 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 23.80% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Packaging Corp Of America (PKG - Free Report) accounts for about 1.12% of total assets, followed by Chesapeake Energy Corp (CHK - Free Report) and Paramount Global - Class B (PARA - Free Report) .
The top 10 holdings account for about 9.38% of total assets under management.
Performance and Risk
DON seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index before fees and expenses. The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.
The ETF has gained about 4.13% so far this year and it's up approximately 4.67% in the last one year (as of 09/18/2023). In the past 52-week period, it has traded between $37.67 and $45.40.
The ETF has a beta of 1.08 and standard deviation of 19.59% for the trailing three-year period, making it a medium risk choice in the space. With about 346 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. MidCap Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DON is a sufficient option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell Mid-Cap Value ETF (IWS - Free Report) and the Vanguard Mid-Cap Value ETF (VOE - Free Report) track a similar index. While iShares Russell Mid-Cap Value ETF has $12.51 billion in assets, Vanguard Mid-Cap Value ETF has $15.70 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.