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Is WisdomTree U.S. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $3.95 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. DLN 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
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.
Operating expenses on an annual basis are 0.28% for DLN, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.29%.
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 in the Information Technology sector - about 20% of the portfolio. 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 added roughly 7.14% so far this year and it's up approximately 22.28% in the last one year (as of 03/20/2024). In the past 52-week period, it has traded between $58.89 and $70.97.
DLN has a beta of 0.88 and standard deviation of 13.89% for the trailing three-year period, which makes the fund a medium risk choice in the 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.
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 $64.73 billion in assets, Vanguard Value ETF has $113.53 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. LargeCap Dividend ETF (DLN) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the WisdomTree U.S. LargeCap Dividend ETF (DLN - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $3.95 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. DLN 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
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.
Operating expenses on an annual basis are 0.28% for DLN, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.29%.
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 in the Information Technology sector - about 20% of the portfolio. 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 added roughly 7.14% so far this year and it's up approximately 22.28% in the last one year (as of 03/20/2024). In the past 52-week period, it has traded between $58.89 and $70.97.
DLN has a beta of 0.88 and standard deviation of 13.89% for the trailing three-year period, which makes the fund a medium risk choice in the 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.
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 $64.73 billion in assets, Vanguard Value ETF has $113.53 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.