For investors seeking momentum, WisdomTree U.S. MidCap Dividend Fund (DON - Free Report) is probably on the radar now. The fund just hit a 52-week high and is up nearly 16% from its 52-week low price of $31.65/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.
DON in Focus
The fund tracks the performance of dividend-paying mid-cap companies in the U.S. equity market. Consumer Discretionary (21.98%), Real Estate (16.17%), and Industrials (14.92%) are the top three sectors. The product charges 38 bps in fees (see Mid Cap ETFs here).
Why the Move?
Mid-caps are an often-overlooked investing option. These securities are viewed as big and safe compared to the highly volatile small-cap exposure. But when compared to the stability of large caps, these are relatively risky bets.
Mid-cap stocks are more domestically-focused than large caps and are thus less exposed to geopolitical risks and negative currency translations. Also, after the solid rally on trade war tensions, most small-cap ETFs are trading at a rich valuation now. Such overvaluation concerns have probably led investors toward this mid-cap ETF to tap the solid U.S. economic growth potential.
More Gains Ahead?
It seems that the fund will perform decently in the near term given a positive weighted alpha of 12.10.
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