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Is WisdomTree U.S. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
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Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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
The fund is managed by Wisdomtree, and has been able to amass over $3.66 billion, which makes 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. LargeCap Dividend Index before fees and expenses.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.44%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 18.90% of the portfolio. Its Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.59% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
DLN's top 10 holdings account for about 26.62% of its total assets under management.
Performance and Risk
The ETF has lost about -0.26% so far this year and was up about 6.61% in the last one year (as of 01/17/2024). In the past 52-week period, it has traded between $58.89 and $66.77.
The fund has a beta of 0.88 and standard deviation of 14.11% for the trailing three-year period, which makes DLN a medium risk choice in this particular space. With about 301 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap 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 $52.40 billion in assets, Vanguard Value ETF has $105.34 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. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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
The fund is managed by Wisdomtree, and has been able to amass over $3.66 billion, which makes 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. LargeCap Dividend Index before fees and expenses.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.44%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 18.90% of the portfolio. Its Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.59% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
DLN's top 10 holdings account for about 26.62% of its total assets under management.
Performance and Risk
The ETF has lost about -0.26% so far this year and was up about 6.61% in the last one year (as of 01/17/2024). In the past 52-week period, it has traded between $58.89 and $66.77.
The fund has a beta of 0.88 and standard deviation of 14.11% for the trailing three-year period, which makes DLN a medium risk choice in this particular space. With about 301 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap 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 $52.40 billion in assets, Vanguard Value ETF has $105.34 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.