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Is WisdomTree U.S. LargeCap ETF (EPS) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. LargeCap ETF (EPS - Free Report) debuted on 02/23/2007, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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 managed by Wisdomtree. EPS has been able to amass assets over $1.06 billion, making 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. Earnings 500 Index before fees and expenses.
The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock 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.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.42%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 26.50% of the portfolio. Financials and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.32% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc-Cl A (GOOGL - Free Report) .
Its top 10 holdings account for approximately 34.43% of EPS's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. LargeCap ETF has gained about 26.11% so far, and was up about 32.82% over the last 12 months (as of 11/22/2024). EPS has traded between $47.87 and $62.97 in this past 52-week period.
The ETF has a beta of 0.98 and standard deviation of 16.66% for the trailing three-year period, making it a medium risk choice in the space. With about 502 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap 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 $66.20 billion in assets, Vanguard Value ETF has $132.22 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 ETF (EPS) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree U.S. LargeCap ETF (EPS - Free Report) debuted on 02/23/2007, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
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 managed by Wisdomtree. EPS has been able to amass assets over $1.06 billion, making 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. Earnings 500 Index before fees and expenses.
The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock 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.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.42%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 26.50% of the portfolio. Financials and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 5.32% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Alphabet Inc-Cl A (GOOGL - Free Report) .
Its top 10 holdings account for approximately 34.43% of EPS's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. LargeCap ETF has gained about 26.11% so far, and was up about 32.82% over the last 12 months (as of 11/22/2024). EPS has traded between $47.87 and $62.97 in this past 52-week period.
The ETF has a beta of 0.98 and standard deviation of 16.66% for the trailing three-year period, making it a medium risk choice in the space. With about 502 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap 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 $66.20 billion in assets, Vanguard Value ETF has $132.22 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.