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Is WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL) a Strong ETF Right Now?

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The WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL) was launched on 06/16/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the World ETFs 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

Managed by Wisdomtree, DNL has amassed assets over $417.98 million, making it one of the larger ETFs in the World ETFs. DNL seeks to match the performance of the WisdomTree Global ex-U.S. Quality Dividend Growth Index before fees and expenses.

The WisdomTree Global ex-U.S. Quality Dividend Growth Index is a fundamentally weighted index that measures the performance of dividend paying stocks with growth characteristics in the developed and emerging markets outside of the United States.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Operating expenses on an annual basis are 0.58% for DNL, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.89%.

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.

Looking at individual holdings, Rio Tinto Ltd (RIO) accounts for about 4.59% of total assets, followed by Taiwan Semiconductor Manufacturing Co Ltd and Unilever Plc (ULVR).

The top 10 holdings account for about 36.72% of total assets under management.

Performance and Risk

So far this year, DNL has added about 7.15%, and is up roughly 17.72% in the last one year (as of 10/13/2021). During this past 52-week period, the fund has traded between $32.44 and $43.87.

DNL has a beta of 0.82 and standard deviation of 22.27% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 276 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree Global exU.S. Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $20.03 billion in assets, Vanguard Dividend Appreciation ETF has $61.19 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.

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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WisdomTree Global exU.S. Quality Dividend Growth ETF (DNL): ETF Research Reports
 
Rio Tinto PLC (RIO) : Free Stock Analysis Report
 
Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
 
iShares Core Dividend Growth ETF (DGRO): ETF Research Reports
 
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