For investors looking for momentum, the WisdomTree Europe Small-Cap Dividend Fund (DFE - Free Report) is probably on your radar now. The fund just hit a 52-week high. Shares of DFE are up roughly 26.9% from their 52-week low price of $47.4/share.
But could more gains be ahead for this ETF? Let’s take a quick look at the fund and the near-term outlook to get a better idea on where it might be headed:
DFE in Focus
DFE focuses on providing exposure to Eurozone small-cap dividend paying equities. Industrials, Consumer Discretionary, and Financials are the top three sectors, with 26.22%, 15.08%, and 13.82% allocation, respectively (as on April 18, 2017). From a geographical perspective, it has around 25.53% exposure to the UK, 14.91% to Sweden, and 12.88% to Italy. It charges 58 basis points in fees per year and has top holdings in Saras SpA, Neopost SA, and Euronav NV with a meager 4.9% allocation to them (see all European Equity ETFs here).
Why the move?
Lately, the Euro region has been gaining a lot of traction. Better-than-expected economic results, a March Purchasing Managers Index of 56.7 and Economic Sentiment Indicator reaching 107.9 in the Euro area have boosted the confidence of investors. Sweden upgraded its growth forecast to 2.6%, up from a December 2016 forecast of 2.4%. Further, a recent poll by Elabe on April 17, 2017 indicates that Le Pen is expected to lose majorly in the second run off in the French Presidential elections on May 7, 2017. Therefore, investors are confident and are looking at this region as a potential investment. Moreover, small cap companies are more domestically focused and provide a more refined exposure to the region.
More Gains Ahead?
Currently, DFE has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. So it is hard to get a handle on its future returns one way or another. However, it has a weighted alpha of 10.7 and a low 14-day volatility of 5.31%. So, there is definitely still some promise for those who want to ride this surging ETF a little further.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>