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Is WisdomTree U.S. Total Dividend ETF (DTD) a Strong ETF Right Now?
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The WisdomTree U.S. Total Dividend ETF (DTD - 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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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
DTD is managed by Wisdomtree, and this fund has amassed over $1.16 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. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.28%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.39%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 18.10% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.09% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
The top 10 holdings account for about 22.81% of total assets under management.
Performance and Risk
The ETF return is roughly 2.06% and is up about 9.91% so far this year and in the past one year (as of 02/12/2024), respectively. DTD has traded between $57.51 and $66.68 during this last 52-week period.
The ETF has a beta of 0.91 and standard deviation of 14.27% for the trailing three-year period, making it a medium risk choice in the space. With about 827 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $52.64 billion in assets, Vanguard Value ETF has $107.81 billion. SCHD has an expense ratio of 0.06% 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?
The WisdomTree U.S. Total Dividend ETF (DTD - 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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
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
DTD is managed by Wisdomtree, and this fund has amassed over $1.16 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. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.28%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.39%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 18.10% of the portfolio, the fund has heaviest allocation to the Financials sector; Information Technology and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.09% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Jpmorgan Chase & Co (JPM - Free Report) .
The top 10 holdings account for about 22.81% of total assets under management.
Performance and Risk
The ETF return is roughly 2.06% and is up about 9.91% so far this year and in the past one year (as of 02/12/2024), respectively. DTD has traded between $57.51 and $66.68 during this last 52-week period.
The ETF has a beta of 0.91 and standard deviation of 14.27% for the trailing three-year period, making it a medium risk choice in the space. With about 827 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $52.64 billion in assets, Vanguard Value ETF has $107.81 billion. SCHD has an expense ratio of 0.06% 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.