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Is WisdomTree International LargeCap Dividend Fund (DOL) a Hot ETF Right Now?

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Designed to provide broad exposure to the Broad Developed World ETFs category of the U.S. equity market, the WisdomTree International LargeCap Dividend Fund (DOL - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.

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.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.

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.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

The fund is managed by Wisdomtree, and has been able to amass over $436.85 M, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree International LargeCap Dividend Index.

WisdomTree International LargeCap Dividend Index is a fundamentally weighted index that measures the performance of the large-capitalization segment of the dividend-paying market in the industrialized world outside the U.S. and Canada. The Index is comprised of the 300 largest companies ranked by market capitalization from the WisdomTree DEFA Index.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.48%.

The fund has a 12-month trailing dividend yield of 3.20%.

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.

Taking into account individual holdings, Royal Dutch Shell Plc Class A (RDSA) accounts for about 2.76% of the fund's total assets, followed by Bp Plc (BP/) and Royal Dutch Shell Plc Class B (RDSB).

Its top 10 holdings account for approximately 20.44% of DOL's total assets under management.

Performance and Risk

The fund's year-to-date return has lost about -3.22%, and is up roughly 5.38% in the last one year (as of 06/21/2018). DOL has traded between $46.97 and $54.08 in the past 52-week period.

The ETF has a beta of 0.92 and standard deviation of 15.20% for the trailing three-year period, making it a medium choice in the space. With about 271 holdings, it effectively diversifies company-specific risk.

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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