A smart beta exchange traded fund, the WisdomTree International High Dividend Fund (DTH) debuted on 06/16/2006, and offers broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
DTH is managed by Wisdomtree, and this fund has amassed over $245.51 M, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, DTH 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
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.
Annual operating expenses for DTH are 0.58%, which makes it one of the more expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.29%.
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.
Taking into account individual holdings, China Mobile Ltd accounts for about 2.53% of the fund's total assets, followed by Bp Plc (BP/) and Royal Dutch Shell Plc Class A (RDSA).
The top 10 holdings account for about 18.7% of total assets under management.
Performance and Risk
The ETF return is roughly 10.51% so far this year and is down about -0.95% in the last one year (as of 07/23/2019). In the past 52-week period, it has traded between $36.10 and $42.81.
The ETF has a beta of 0.78 and standard deviation of 11.39% for the trailing three-year period, making it a medium risk choice in the space. With about 494 holdings, it effectively diversifies company-specific risk.
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 $60.67 B in assets, iShares Core MSCI EAFE ETF has $65.49 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.
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
iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports
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