Launched on 06/16/2006, the WisdomTree U.S. Dividend exFinancials ETF (DTN) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Wisdomtree. It has amassed assets over $542.78 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.17%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Consumer Staples sector--about 15.10% of the portfolio. Utilities and Information Technology round out the top three.
Looking at individual holdings, Altria Group Inc (NYSE:MO) accounts for about 3.62% of total assets, followed by Lumen Technologies Inc (LUMN) and Philip Morris International Inc (NYSE:PM).
The top 10 holdings account for about 20.95% of total assets under management.
Performance and Risk
DTN seeks to match the performance of the WisdomTree U.S. Dividend ex-Financials Index before fees and expenses. The WisdomTree U.S. Dividend ex-Financials Index measures the performance of high dividend-yielding stocks outside the financial sector.
The ETF has gained about 23.56% so far this year and was up about 22.86% in the last one year (as of 12/24/2021). In the past 52-week period, it has traded between $82.63 and $100.85.
The ETF has a beta of 1.02 and standard deviation of 23.67% for the trailing three-year period, making it a medium risk choice in the space. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. Dividend exFinancials ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DTN is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $59.15 billion in assets, Vanguard Value ETF has $91.51 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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 U.S. Dividend exFinancials ETF (DTN): ETF Research Reports
Altria Group, Inc. (MO): Free Stock Analysis Report
Philip Morris International Inc. (PM): Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
Lumen Technologies, Inc. (LUMN): Free Stock Analysis Report
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