Launched on 06/16/2006, the WISDMTR-IN LCDF (DOL) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the U.S. equity market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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 sponsored by Wisdomtree. It has amassed assets over $427.64 M, making it one of the average sized ETFs in the Broad Developed World ETFs. DOL seeks to match the performance of the WisdomTree International LargeCap Dividend Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.48% for DOL, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.61%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Royal Dutch Shell Plc Class A (RDSA) accounts for about 2.11% of the fund's total assets, followed by Bp Plc (BP/) and China Mobile Ltd.
The top 10 holdings account for about 18.59% of total assets under management.
Performance and Risk
So far this year, the ETF has lost about -2.33%, and was up about 4.22% in the last one year (as of 07/18/2018). DOL has traded between $47.16 and $54.08 in the past 52-week period.
DOL has a beta of 0.91 and standard deviation of 14.93% for the trailing three-year period, which makes the fund a medium choice in the space. With about 269 holdings, it effectively diversifies company-specific risk.
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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WISDMTR-IN LCDF (DOL): ETF Research Reports
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