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Is WisdomTree U.S. Quality Dividend Growth ETF (DGRW) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) debuted on 05/22/2013, and offers broad exposure to the Style Box - Large Cap Value 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.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Wisdomtree. It has amassed assets over $14.55 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.28%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.62%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 21.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Consumer Staples round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 7.75% of total assets, followed by Apple Inc (AAPL - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 36.21% of total assets under management.
Performance and Risk
The ETF has lost about -2.46% so far this year and it's up approximately 6.40% in the last one year (as of 03/13/2025). In the past 52-week period, it has traded between $72.31 and $85.66.
The ETF has a beta of 0.85 and standard deviation of 13.92% for the trailing three-year period, making it a medium risk choice in the space. With about 303 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 $29.96 billion in assets, Vanguard Dividend Appreciation ETF has $85.32 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.05%.
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?
A smart beta exchange traded fund, the WisdomTree U.S. Quality Dividend Growth ETF (DGRW - Free Report) debuted on 05/22/2013, and offers broad exposure to the Style Box - Large Cap Value 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.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is sponsored by Wisdomtree. It has amassed assets over $14.55 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. Quality Dividend Growth Index.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.28%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.62%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 21.40% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Consumer Staples round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 7.75% of total assets, followed by Apple Inc (AAPL - Free Report) and Exxon Mobil Corp (XOM - Free Report) .
The top 10 holdings account for about 36.21% of total assets under management.
Performance and Risk
The ETF has lost about -2.46% so far this year and it's up approximately 6.40% in the last one year (as of 03/13/2025). In the past 52-week period, it has traded between $72.31 and $85.66.
The ETF has a beta of 0.85 and standard deviation of 13.92% for the trailing three-year period, making it a medium risk choice in the space. With about 303 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 $29.96 billion in assets, Vanguard Dividend Appreciation ETF has $85.32 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.05%.
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.