Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree International High Dividend Fund (DTH) provides investors 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
DTH is managed by Wisdomtree, and this fund has amassed over $265.51 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
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.
Operating expenses on an annual basis are 0.58% for DTH, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 4.46%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, China Mobile Ltd accounts for about 2.67% of the fund's total assets, followed by Novartis Ag (NOVN) and Nestle Sa (NESN).
Its top 10 holdings account for approximately 21.25% of DTH's total assets under management.
Performance and Risk
So far this year, DTH has lost about -9.53%, and is down about -7.42% in the last one year (as of 12/06/2018). During this past 52-week period, the fund has traded between $38.42 and $47.36.
The ETF has a beta of 0.87 and standard deviation of 14.72% for the trailing three-year period, making it a medium risk choice in the space. With about 484 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 $54.36 B in assets, iShares MSCI EAFE ETF has $64.01 B. IEFA has an expense ratio of 0.08% and EFA charges 0.32%.
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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