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?
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.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, DTH has amassed assets over $310.63 M, making 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.58% for DTH, making it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 4.24%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Novartis Ag (NOVN) accounts for about 2.26% of total assets, followed by Royal Dutch Shell Plc Class A (RDSA) and Bp Plc (BP/).
DTH's top 10 holdings account for about 20.58% of its total assets under management.
Performance and Risk
DTH has lost about -4.23% so far this year, and as of 08/13/2018, was up about 1.04% in the last one year. In the past 52-week period, the fund has traded between $40.88 and $47.36.
The fund has a beta of 0.91 and standard deviation of 15.39% for the trailing three-year period, which makes DTH a medium choice in this particular 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 $57.70 B in assets, iShares MSCI EAFE ETF has $70.41 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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