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Is WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) is a smart beta exchange traded fund launched on 07/25/2013.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $344.75 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. DGRS seeks to match the performance of the WisdomTree U.S. SmallCap Quality Dividend Growth Index before fees and expenses.
The WisdomTree U.S. SmallCap Quality Dividend Growth Index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying stocks with growth characteristics.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.38% for DGRS, making it on par with most peer products in the space.
DGRS's 12-month trailing dividend yield is 2.20%.
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.
DGRS's heaviest allocation is in the Consumer Discretionary sector, which is about 23.20% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Mdc Holdings Inc accounts for about 2.17% of total assets, followed by Comstock Resources Inc (CRK - Free Report) and Cohen & Steers Inc (CNS - Free Report) .
The top 10 holdings account for about 16.17% of total assets under management.
Performance and Risk
The ETF has added roughly 4.05% and it's up approximately 20.90% so far this year and in the past one year (as of 04/02/2024), respectively. DGRS has traded between $38.52 and $49.64 during this last 52-week period.
The fund has a beta of 1.13 and standard deviation of 20.28% for the trailing three-year period, which makes DGRS a medium risk choice in this particular space. With about 248 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $27 billion in assets, Vanguard Dividend Appreciation ETF has $78.34 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 - Small Cap Blend.
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. SmallCap Quality Dividend Growth ETF (DGRS) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) is a smart beta exchange traded fund launched on 07/25/2013.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $344.75 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. DGRS seeks to match the performance of the WisdomTree U.S. SmallCap Quality Dividend Growth Index before fees and expenses.
The WisdomTree U.S. SmallCap Quality Dividend Growth Index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying stocks with growth characteristics.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.38% for DGRS, making it on par with most peer products in the space.
DGRS's 12-month trailing dividend yield is 2.20%.
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.
DGRS's heaviest allocation is in the Consumer Discretionary sector, which is about 23.20% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Mdc Holdings Inc accounts for about 2.17% of total assets, followed by Comstock Resources Inc (CRK - Free Report) and Cohen & Steers Inc (CNS - Free Report) .
The top 10 holdings account for about 16.17% of total assets under management.
Performance and Risk
The ETF has added roughly 4.05% and it's up approximately 20.90% so far this year and in the past one year (as of 04/02/2024), respectively. DGRS has traded between $38.52 and $49.64 during this last 52-week period.
The fund has a beta of 1.13 and standard deviation of 20.28% for the trailing three-year period, which makes DGRS a medium risk choice in this particular space. With about 248 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core Dividend Growth ETF (DGRO - Free Report) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG - Free Report) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $27 billion in assets, Vanguard Dividend Appreciation ETF has $78.34 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
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 - Small Cap Blend.
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.