WisdomTree, in a bid to deepen its reach into the lush world of
dividend payouts, filed regulatory paperwork to bring two dividend
to market at a time when investors are increasingly concerned about
the ultra-low yields that prevail in the world of bonds.
The two funds, the WisdomTree U.S. Dividend Growth Fund and the
WisdomTree U.S. Small Cap Dividend Growth Fund, would serve up
access to carefully selected, dividend-paying securities that have
met long-term earnings growth expectations. WisdomTree is known in
the world of ETFs for its fundamental indexes that screen stocks
for attractive dividends and earnings.
The filings come at a crucial, post-2008 meltdown juncture where
investors are regaining an appetite for risk and beginning to steer
clear of lower-yielding bonds to instead find yield in the
higher-risk cash payouts that dividend-focused funds offer.
WisdomTree has already profited handsomely from investor
interest in dividend ETFs. Its WisdomTree Emerging Markets Equity
Income fund (NYSEArca:DEM), which invests in emerging markets
securities with relatively high dividend yields, has $5.29 billion
in assets under management.
WisdomTree has yet to give either fund a price or ticker, but
did say in the filings that both funds will have their primary
listings on the Nasdaq. As a benchmark, WisdomTree's DEM has an
annual expense ratio of 0.63 percent, or $63 for each $10,000
The Vanguard Dividend Appreciation ETF (NYSEArca:VIG) tracks
stocks with a record of increasing dividends, and has $13.12
billion in assets with an expense ratio of just 13 basis
The nuances of the two funds' investment strategies are as
- The WisdomTree U.S. Dividend Growth Fund will seek the yield
performance of the WisdomTree U.S. Dividend Growth Index via a
passive strategy, seeking to hold all of the securities on that
index, which comprise the 300 companies from the WisdomTree
Dividend Index with the best combined growth and quality. To be
included on the index, companies must have paid regular dividends
for 12 consecutive months and have a market capitalization of at
least $2 billion, with representations of no more than 5 percent
in any one company, and no more than 20 percent in any one
- The WisdomTree U.S. Small Cap Dividend Growth Fund will
follow a passive indexing strategy, using the WisdomTree U.S.
Small Cap Dividend Growth Index is its underlying. The index
selects the bottom 25 percent of the market capitalization of the
WisdomTree Dividend Index after the 300 largest companies have
been removed. To be included in the index, companies must have a
market capitalization of at least $100 million; and have paid
cash dividends regularly for 12 consecutive months, with
representations of no more than 2 percent in any one company and
no more than 20 percent in any one sector.
Permalink | 'copy; Copyright 2009 IndexUniverse LLC. All rights
Don't forget to check IndexUniverse.com's ETF Data
2013 IndexUniverse LLC
. All Rights Reserved.