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Is WisdomTree U.S. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?
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The WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) made its debut on 05/22/2013, and is a smart beta exchange traded fund that provides 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.
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.
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
Because the fund has amassed over $15.05 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. DGRW is managed by Wisdomtree. This particular fund seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index before fees and expenses.
The WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics.
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.
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 1.50%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 29.40% of the portfolio. Healthcare and Industrials round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 6.89% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Broadcom Inc (AVGO - Free Report) .
Its top 10 holdings account for approximately 36.56% of DGRW's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Quality Dividend Growth ETF has gained about 21.83% so far, and is up about 32.48% over the last 12 months (as of 11/07/2024). DGRW has traded between $64.60 and $84.77 in this past 52-week period.
The ETF has a beta of 0.86 and standard deviation of 14.31% for the trailing three-year period, making it a medium risk choice in the space. With about 300 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Quality Dividend Growth 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 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 $31.01 billion in assets, Vanguard Dividend Appreciation ETF has $87.85 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 - 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. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?
The WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) made its debut on 05/22/2013, and is a smart beta exchange traded fund that provides 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.
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.
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
Because the fund has amassed over $15.05 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. DGRW is managed by Wisdomtree. This particular fund seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index before fees and expenses.
The WisdomTree U.S. Quality Dividend Growth Index is a fundamentally weighted index that consists of dividend-paying stocks with growth characteristics.
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.
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 1.50%.
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.
This ETF has heaviest allocation in the Information Technology sector - about 29.40% of the portfolio. Healthcare and Industrials round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 6.89% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Broadcom Inc (AVGO - Free Report) .
Its top 10 holdings account for approximately 36.56% of DGRW's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Quality Dividend Growth ETF has gained about 21.83% so far, and is up about 32.48% over the last 12 months (as of 11/07/2024). DGRW has traded between $64.60 and $84.77 in this past 52-week period.
The ETF has a beta of 0.86 and standard deviation of 14.31% for the trailing three-year period, making it a medium risk choice in the space. With about 300 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Quality Dividend Growth 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 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 $31.01 billion in assets, Vanguard Dividend Appreciation ETF has $87.85 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 - 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.