Launched on 06/16/2006, the WisdomTree International High Dividend Fund (DTH) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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 $250.04 M, making it one of the average sized ETFs in the Broad Developed World ETFs. DTH 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.58% for this ETF, which makes it one of the more expensive products in the space.
DTH's 12-month trailing dividend yield is 4.66%.
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.
When you look at individual holdings, China Mobile Ltd accounts for about 2.69% of the fund's total assets, followed by Novartis Ag (NOVN) and Nestle Sa (NESN).
Performance and Risk
The ETF has lost about -13.30% so far this year and is down about -12.95% in the last one year (as of 12/28/2018). In the past 52-week period, it has traded between $36.10 and $47.36.
DTH has a beta of 0.87 and standard deviation of 14.67% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 480 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 $51.78 B in assets, iShares MSCI EAFE ETF has $61.33 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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WISTR-INT HI (DTH): ETF Research Reports
EMG MKT FREE AS (EFA): ETF Research Reports
Novan Inc. (NOVN) : Free Stock Analysis Report
ISHARS-CR MS EA (IEFA): ETF Research Reports
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