Back to top

Image: Bigstock

Is WisdomTree Global ex-U.S. Quality Dividend Growth ETF (DNL) a Strong ETF Right Now?

Read MoreHide Full Article

Designed to provide broad exposure to the World ETFs category of the market, the WisdomTree Global ex-U.S. Quality Dividend Growth ETF (DNL - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.

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.

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.

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.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

Managed by Wisdomtree, DNL has amassed assets over $564.92 million, making it one of the larger ETFs in the World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree Global ex-U.S. Quality Dividend Growth Index.

The WisdomTree Global ex-U.S. Quality Dividend Growth Index is a fundamentally weighted index that measures the performance of dividend paying stocks with growth characteristics in the developed and emerging markets outside of the United States.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.42% for this ETF, which makes it one of the cheaper products in the space.

It's 12-month trailing dividend yield comes in at 2.27%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 5.67% of total assets, followed by Industria De Diseno Textil (ITX) and Mediatek Inc.

DNL's top 10 holdings account for about 34.92% of its total assets under management.

Performance and Risk

The ETF has gained about 1.31% and it's up approximately 5.28% so far this year and in the past one year (as of 01/20/2025), respectively. DNL has traded between $35.56 and $40.81 during this last 52-week period.

DNL has a beta of 0.94 and standard deviation of 18.40% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 329 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree Global ex-U.S. Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the World ETFs 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 $30.77 billion in assets, Vanguard Dividend Appreciation ETF has $88.79 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 World ETFs.

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.

Published in