Investors looking for exchange-traded products that emphasize
dividend growth have one more option to consider as WisdomTree,
one of the dominant issuers of dividend
, rolled out the WisdomTree U.S. SmallCap Dividend Growth Fund (
The WisdomTree U.S. SmallCap Dividend Growth Fund is the
small-cap equivalent of the WisdomTree U.S. Dividend Growth Fund
). DGRW, which ranks its holdings based on
earnings quality, return on equity and return on
, debuted two months ago and already has over $35.2 million in
assets under management.
"DGRS is the first, and only,strategy focusing on the U.S.
market's small-cap dividend growth leaders, a segment we believe
offers some of the most attractive dividend growth
opportunities," said WisdomTree Research Director Jeremy Schwartz
in a statement
DGRS has an annual expense ratio of 0.38 percent compared to
0.28 percent for its large-cap brother. Half of the fund's
combined weight is allocated to two sectors - industrials and
consumer discretionary. Sector allocations are capped at 25
percent when DGRS undergoes its annual rebalance. Materials names
account for almost 14 percent of the new ETF's weight while
technology receives a weight of 13.2 percent.
Three Small-Cap ETFs For The Second Half
Those sector weights highlight the fact that DGRS is levered
to an improving U.S. economy and offers investors exposure to
new sources of dividend growth
rather than being heavy on staples and utilities names as so many
large-cap payout ETFs are.
"Many assume that high quality, dividend growth opportunities
are confined to blue chip, large-cap stocks. But in an
environment where the U.S. economy is improving and interest
rates are beginning to rise, small caps,more closely tied to the
U.S. economy, will likely become more attractive than large caps,
which are more globally sensitive," said Schwartz.
Top-10 holdings in the new ETF include Questcor
), Janus Capital (NYSE:
) and Evercore Partners (NYSE:
) is no stranger to success with small-cap dividend ETFs. The
firm's WisdomTree SmallCap Dividend Fund (NYSE:
), which last month celebrated its seventh birthday, has $792.5
million in assets under management. The $1.6 billion WisdomTree
Emerging Markets SmallCap Dividend Fund (NYSE:
) is one of the largest small-cap ETFs focusing on emerging
Rather than focusing on
dividend increase streaks
as do so many popular payout funds, DGRS is "dividend weighted
annually to reflect the proportionate share of the aggregate cash
dividends each component company is projected to pay in the
coming year, based on the most recently declared dividend per
share," according to WisdomTree.
For more on ETFs, click
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