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?
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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
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.
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 $316.15 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
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.
It has a 12-month trailing dividend yield of 4.20%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Royal Dutch Shell Plc Class A (RDSA) accounts for about 2.43% of the fund's total assets, followed by Bp Plc (BP/) and China Mobile Ltd.
The top 10 holdings account for about 20.4% of total assets under management.
Performance and Risk
DTH has lost about -3.20% so far this year, and as of 07/19/2018, it's up approximately 2.64% in the last one year. In the past 52-week period, the fund has traded between $40.88 and $47.36.
DTH has a beta of 0.92 and standard deviation of 15.41% for the trailing three-year period, which makes the fund a medium choice in the space. With about 487 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 $58.06 B in assets, iShares MSCI EAFE ETF has $72.47 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
ISHARS-CR MS EA (IEFA): ETF Research Reports
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