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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?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Managed by Wisdomtree, DTH has amassed assets over $247.71 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

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain 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.

It's 12-month trailing dividend yield comes in at 4.40%.

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 2.81% of the fund's total assets, followed by Novartis Ag (NOVN) and Nestle Sa (NESN).

The top 10 holdings account for about 21.42% of total assets under management.

Performance and Risk

The ETF has gained about 5.12% so far this year and is down about -5.56% in the last one year (as of 02/12/2019). In the past 52-week period, it has traded between $36.10 and $45.10.

The fund has a beta of 0.81 and standard deviation of 14.10% for the trailing three-year period, which makes DTH a medium risk choice in this particular 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 $54.52 B in assets, iShares MSCI EAFE ETF has $63.79 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.


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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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