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Is WisdomTree International High Dividend Fund (DTH) a Strong ETF Right Now?

Zacks Equity Research

The WisdomTree International High Dividend Fund (DTH) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.

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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

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.

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.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

The fund is managed by Wisdomtree. DTH has been able to amass assets over $247.19 M, making it one of the average sized ETFs in the Broad Developed World ETFs. DTH, before fees and expenses, seeks to match the performance of the WisdomTree International High Dividend Index.

The WisdomTree International High Dividend Index is a fundamentally weighted Index that measures the performance of companies with high dividend yields selected from the WisdomTree International Equity Index.

Cost & Other Expenses

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

With one of the more expensive products in the space, this ETF has annual operating expenses of 0.58%.

DTH's 12-month trailing dividend yield is 4.60%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Nestle Sa (NESN) accounts for about 2.95% of total assets, followed by Novartis Ag (NOVN) and China Mobile Ltd.

DTH's top 10 holdings account for about 21.79% of its total assets under management.

Performance and Risk

The ETF has added roughly 8.36% so far this year and is down about -4.49% in the last one year (as of 06/07/2019). In the past 52-week period, it has traded between $36.10 and $43.77.

The ETF has a beta of 0.78 and standard deviation of 13.51% for the trailing three-year period, making it a medium risk choice in the space. With about 470 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree International High Dividend Fund is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.

IShares MSCI EAFE ETF (EFA) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA) tracks MSCI EAFE Investable Market Index. IShares MSCI EAFE ETF has $61.60 B in assets, iShares Core MSCI EAFE ETF has $63.53 B. EFA has an expense ratio of 0.31% and IEFA charges 0.08%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed 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 International High Dividend Fund (DTH): ETF Research Reports
 
iShares MSCI EAFE ETF (EFA): ETF Research Reports
 
NOVAN INC (NOVN) : Free Stock Analysis Report
 
iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports
 
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