Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the WisdomTree International High Dividend Fund (DTH) is a smart beta exchange traded fund launched on 06/16/2006.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
The fund is managed by Wisdomtree. DTH has been able to amass assets over $256.22 M, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the WisdomTree International High Dividend Index before fees and expenses.
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.
The fund has a 12-month trailing dividend yield of 4.25%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, China Mobile Ltd accounts for about 2.78% of total assets, followed by Novartis Ag (NOVN) and Nestle Sa (NESN).
Its top 10 holdings account for approximately 21.41% of DTH's total assets under management.
Performance and Risk
The ETF has added roughly 8.73% and is down about -4.68% so far this year and in the past one year (as of 03/07/2019), respectively. DTH has traded between $36.10 and $44.81 during this last 52-week period.
The ETF has a beta of 0.79 and standard deviation of 13.80% for the trailing three-year period, making it a medium risk choice in the space. With about 477 holdings, it effectively diversifies company-specific risk.
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 $57.26 B in assets, iShares MSCI EAFE ETF has $64.93 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.
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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