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Is WisdomTree U.S. Total Dividend ETF (DTD) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Wisdomtree, DTD has amassed assets over $1.05 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
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.
Operating expenses on an annual basis are 0.28% for DTD, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.62%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 17.10% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 3.51% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 22.62% of DTD's total assets under management.
Performance and Risk
So far this year, DTD return is roughly 1.41%, and is up about 12.20% in the last one year (as of 10/11/2023). During this past 52-week period, the fund has traded between $55 and $64.29.
DTD has a beta of 0.91 and standard deviation of 14.73% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 823 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total 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 $48.05 billion in assets, Vanguard Value ETF has $98.33 billion. IWD has an expense ratio of 0.19% 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?
A smart beta exchange traded fund, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Wisdomtree, DTD has amassed assets over $1.05 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
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.
Operating expenses on an annual basis are 0.28% for DTD, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.62%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 17.10% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 3.51% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 22.62% of DTD's total assets under management.
Performance and Risk
So far this year, DTD return is roughly 1.41%, and is up about 12.20% in the last one year (as of 10/11/2023). During this past 52-week period, the fund has traded between $55 and $64.29.
DTD has a beta of 0.91 and standard deviation of 14.73% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 823 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total 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 $48.05 billion in assets, Vanguard Value ETF has $98.33 billion. IWD has an expense ratio of 0.19% 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.