Is WisdomTree Global ex-U.S. Quality Dividend Growth ETF (DNL) a Strong ETF Right Now?

The WisdomTree Global ex-U.S. Quality Dividend Growth ETF (DNL) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the World ETFs category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

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.

On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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. DNL has been able to amass assets over $648.14 million, making it one of the larger ETFs in the World ETFs. DNL, before fees and expenses, seeks to match the performance of the WisdomTree Global ex-U.S. Quality Dividend Growth Index.

The WisdomTree Global ex-U.S. Quality Dividend Growth Index is a fundamentally weighted index that measures the performance of dividend paying stocks with growth characteristics in the developed and emerging markets outside of the United States.

Cost & Other Expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.42%, making it one of the cheaper products in the space.

It's 12-month trailing dividend yield comes in at 1.74%.

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, Novo Nordisk A/s-B (NOVOB) accounts for about 4.62% of the fund's total assets, followed by Samsung Electronics Co Ltd and Taiwan Semiconductor Manufacturing Co Ltd.

Its top 10 holdings account for approximately 35.01% of DNL's total assets under management.

Performance and Risk

The ETF has added roughly 4.30% and was up about 15.20% so far this year and in the past one year (as of 03/11/2024), respectively. DNL has traded between $31.84 and $38.92 during this last 52-week period.

The fund has a beta of 0.97 and standard deviation of 18.38% for the trailing three-year period, which makes DNL a medium risk choice in this particular space. With about 304 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree Global ex-U.S. Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $26.52 billion in assets, Vanguard Dividend Appreciation ETF has $77.19 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.

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 key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.

Get it free >>

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

WisdomTree Global ex-U.S. Quality Dividend Growth ETF (DNL): ETF Research Reports

Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports

iShares Core Dividend Growth ETF (DGRO): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.