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Is WisdomTree U.S. SmallCap Dividend ETF (DES) a Strong ETF Right Now?

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A smart beta exchange traded fund, the WisdomTree U.S. SmallCap Dividend ETF (DES - Free Report) debuted on 06/16/2006, and offers broad exposure to the Style Box - Small Cap Value category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

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.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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

The fund is managed by Wisdomtree, and has been able to amass over $1.87 billion, which makes it one of the average sized ETFs in the Style Box - Small Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Dividend Index.

The WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the US dividend-paying market.

Cost & Other Expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Operating expenses on an annual basis are 0.38% for this ETF, which makes it on par with most peer products in the space.

DES's 12-month trailing dividend yield is 2.42%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

When you look at individual holdings, Us Dollaraccounts for about 64.83% of the fund's total assets, followed by Dreyfus Trsy Oblig Cash Mgmt Cl Ins and Sabra Health Care Reit Inc (SBRA).

The top 10 holdings account for about 108.84% of total assets under management.

Performance and Risk

So far this year, DES has added about 1.56%, and is up about 2.33% in the last one year (as of 12/22/2025). During this past 52-week period, the fund has traded between $28.02 and $35.22.

DES has a beta of 0.96 and standard deviation of 19.58% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 566 holdings, it effectively diversifies company-specific risk .

Alternatives

WisdomTree U.S. SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

iShares Russell 2000 Value ETF (IWN) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR) tracks CRSP U.S. Small Cap Value Index. iShares Russell 2000 Value ETF has $12.34 billion in assets, Vanguard Small-Cap Value ETF has $32.44 billion. IWN has an expense ratio of 0.24% and VBR changes 0.07%.

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 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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