U.S. Markets closed

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?

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.

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.

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.

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

Because the fund has amassed over $258.32 M, this makes it one of the average sized ETFs in the Broad Developed World ETFs. DTH is managed by Wisdomtree. Before fees and expenses, this particular fund 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

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

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

It's 12-month trailing dividend yield comes in at 4.38%.

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.

Taking into account individual holdings, China Mobile Ltd accounts for about 2.71% of the fund's total assets, followed by Novartis Ag (RIO) and Nestle Sa (ENI).

Its top 10 holdings account for approximately 21.58% of DTH's total assets under management.

Performance and Risk

So far this year, DTH return is roughly 5.52%, and is down about -11.76% in the last one year (as of 01/21/2019). During this past 52-week period, the fund has traded between $36.10 and $47.36.

The ETF has a beta of 0.81 and standard deviation of 14.41% for the trailing three-year period, making it a medium risk choice in the space. With about 478 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree International High Dividend Fund is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Core MSCI EAFE ETF (IEFA) tracks MSCI EAFE Investable Market Index and the iShares MSCI EAFE ETF (EFA) tracks MSCI EAFE Index. IShares Core MSCI EAFE ETF has $55.23 B in assets, iShares MSCI EAFE ETF has $64.41 B. IEFA has an expense ratio of 0.08% and EFA charges 0.31%.

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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WisdomTree International High Dividend Fund (DTH): ETF Research Reports
 
iShares MSCI EAFE ETF (EFA): ETF Research Reports
 
Rio Tinto PLC (RIO) : Free Stock Analysis Report
 
iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research