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Is WisdomTree U.S. Total Dividend ETF (DTD) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, DTD has amassed assets over $1.35 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, DTD seeks to match the performance of the WisdomTree U.S. Dividend Index.
The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity 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.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.14%.
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 Financials sector - about 19.90% of the portfolio. Information Technology and Consumer Staples round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.10% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Microsoft Corp (MSFT - Free Report) .
DTD's top 10 holdings account for about 23.8% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Total Dividend ETF has gained about 18.80% so far, and is up roughly 20.73% over the last 12 months (as of 12/23/2024). DTD has traded between $64.49 and $80.53 in this past 52-week period.
The ETF has a beta of 0.90 and standard deviation of 14.13% for the trailing three-year period, making it a medium risk choice in the space. With about 823 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total 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 $64.37 billion in assets, Vanguard Value ETF has $127.55 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. Total Dividend ETF (DTD) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree U.S. Total Dividend ETF (DTD - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, DTD has amassed assets over $1.35 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, DTD seeks to match the performance of the WisdomTree U.S. Dividend Index.
The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity 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.
Operating expenses on an annual basis are 0.28% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.14%.
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 Financials sector - about 19.90% of the portfolio. Information Technology and Consumer Staples round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.10% of the fund's total assets, followed by Jpmorgan Chase & Co (JPM - Free Report) and Microsoft Corp (MSFT - Free Report) .
DTD's top 10 holdings account for about 23.8% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. Total Dividend ETF has gained about 18.80% so far, and is up roughly 20.73% over the last 12 months (as of 12/23/2024). DTD has traded between $64.49 and $80.53 in this past 52-week period.
The ETF has a beta of 0.90 and standard deviation of 14.13% for the trailing three-year period, making it a medium risk choice in the space. With about 823 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Total 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 $64.37 billion in assets, Vanguard Value ETF has $127.55 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.