Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the WisdomTree International High Dividend Fund (DTH) is a smart beta exchange traded fund launched on 06/16/2006.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $227.77 M, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, 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
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 4.26%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Bp Plc (BP/) accounts for about 2.33% of the fund's total assets, followed by Total Sa (FP) and Royal Dutch Shell Plc Class A (RDSA).
DTH's top 10 holdings account for about 18.55% of its total assets under management.
Performance and Risk
So far this year, DTH has gained about 0.33%, and it's up approximately 13.58% in the last one year (as of 01/20/2020). During this past 52-week period, the fund has traded between $36.78 and $42.34.
DTH has a beta of 0.79 and standard deviation of 11.37% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 476 holdings, it effectively diversifies company-specific risk.
WisdomTree International High Dividend Fund is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI EAFE ETF (EFA) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA) tracks MSCI EAFE Investable Market Index. IShares MSCI EAFE ETF has $65.33 B in assets, iShares Core MSCI EAFE ETF has $74.94 B. EFA has an expense ratio of 0.32% and IEFA charges 0.07%.
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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WisdomTree International High Dividend Fund (DTH): ETF Research Reports
iShares MSCI EAFE ETF (EFA): ETF Research Reports
iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports
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