Is WisdomTree International MidCap Dividend Fund (DIM) a Hot ETF Right Now?
Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the WisdomTree International MidCap Dividend Fund (DIM) 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 $289.17 M, which makes 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 MidCap Dividend Index before fees and expenses.
WisdomTree International MidCap Dividend Index is a fundamentally weighted index, measures the performance of the mid-capitalization segment of the dividend-paying market in the industrialized world outside the U.S & Canada. The Index is comprised of the companies that comprise the top 75% of market capitalization of the WisdomTree DEFA Index after the 300 largest companies have been removedn.
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.
Annual operating expenses for DIM are 0.58%, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 2.91%.
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.
When you look at individual holdings, Telefonica Deutschland Holding (O2D) accounts for about 0.69% of the fund's total assets, followed by Snam Spa (SRG) and Persimmon Plc (PSN).
Its top 10 holdings account for approximately 5.73% of DIM's total assets under management.
Performance and Risk
The fund's year-to-date return has lost about -3.07%, and is up roughly 3.75% in the last one year (as of 08/31/2018). DIM has traded between $63.31 and $73.67 in the past 52-week period.
The ETF has a beta of 0.90 and standard deviation of 14.02% for the trailing three-year period, making it a low choice in the space. With about 632 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.
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WISDMTR-IN D MC (DIM): ETF Research Reports
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