U.S. Markets open in 1 hr 39 mins

Is WisdomTree International LargeCap Dividend Fund (DOL) a Hot ETF Right Now?

Zacks Equity Research
Wall Street finished in the green reversing its five-day negative trend on Thursday following news that United States and China have ramped up their efforts to resolve lingering trade disputes

Launched on 06/16/2006, the WisdomTree International LargeCap Dividend Fund (DOL) 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?

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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.

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

The fund is managed by Wisdomtree, and has been able to amass over $425.99 M, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree International LargeCap Dividend Index.

WisdomTree International LargeCap Dividend Index is a fundamentally weighted index that measures the performance of the large-capitalization segment of the dividend-paying market in the industrialized world outside the U.S. and Canada. The Index is comprised of the 300 largest companies ranked by market capitalization from the WisdomTree DEFA Index.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.

DOL's 12-month trailing dividend yield is 3.58%.

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.

Taking into account individual holdings, Royal Dutch Shell Plc Class A (RDSA) accounts for about 2.00% of the fund's total assets, followed by China Mobile Ltd and Hsbc Holdings Plc (HSBA).

Performance and Risk

DOL has lost about -1.61% so far this year, and as of 08/10/2018, was up about 3.40% in the last one year. In the past 52-week period, the fund has traded between $47.16 and $54.08.

DOL has a beta of 0.89 and standard deviation of 14.91% for the trailing three-year period, which makes the fund a medium choice in the space. With about 268 holdings, it effectively diversifies company-specific risk.

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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
WISDMTR-IN LCDF (DOL): ETF Research Reports
 
To read this article on Zacks.com click here.