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Is WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS) a Strong ETF Right Now?
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The WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) made its debut on 07/25/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Blend 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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
DGRS is managed by Wisdomtree, and this fund has amassed over $618.83 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Quality Dividend Growth Index.
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
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 0.38%, making it on par with most peer products in the space.
DGRS's 12-month trailing dividend yield is 1.99%.
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.
For DGRS, it has heaviest allocation in the Industrials sector --about 23.70% of the portfolio --while Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Cohen & Steers Inc (CNS - Free Report) accounts for about 2.38% of the fund's total assets, followed by Kontoor Brands Inc (KTB - Free Report) and Viper Energy Inc (VNOM - Free Report) .
Its top 10 holdings account for approximately 18.58% of DGRS's total assets under management.
Performance and Risk
The ETF has gained about 17.24% so far this year and is up roughly 25.82% in the last one year (as of 12/13/2024). In the past 52-week period, it has traded between $44.91 and $56.61.
The ETF has a beta of 1.11 and standard deviation of 20.44% for the trailing three-year period, making it a medium risk choice in the space. With about 239 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 $30.56 billion in assets, Vanguard Dividend Appreciation ETF has $87.84 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?
The WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS - Free Report) made its debut on 07/25/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Blend 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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
DGRS is managed by Wisdomtree, and this fund has amassed over $618.83 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Quality Dividend Growth Index.
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
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 0.38%, making it on par with most peer products in the space.
DGRS's 12-month trailing dividend yield is 1.99%.
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.
For DGRS, it has heaviest allocation in the Industrials sector --about 23.70% of the portfolio --while Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Cohen & Steers Inc (CNS - Free Report) accounts for about 2.38% of the fund's total assets, followed by Kontoor Brands Inc (KTB - Free Report) and Viper Energy Inc (VNOM - Free Report) .
Its top 10 holdings account for approximately 18.58% of DGRS's total assets under management.
Performance and Risk
The ETF has gained about 17.24% so far this year and is up roughly 25.82% in the last one year (as of 12/13/2024). In the past 52-week period, it has traded between $44.91 and $56.61.
The ETF has a beta of 1.11 and standard deviation of 20.44% for the trailing three-year period, making it a medium risk choice in the space. With about 239 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 $30.56 billion in assets, Vanguard Dividend Appreciation ETF has $87.84 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.