Is WisdomTree International High Dividend Fund (DTH) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the WisdomTree International High Dividend Fund (DTH) is a smart beta exchange traded fund launched on 06/16/2006.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. DTH has been able to amass assets over $250.69 M, making it one of the average sized ETFs in the Broad Developed World ETFs. DTH, before fees and expenses, seeks to match the performance of the WisdomTree International High Dividend Index.
The WisdomTree International High Dividend Index is a fundamentally weighted Index that measures the performance of companies with high dividend yields selected from the WisdomTree International Equity Index.
Cost & Other Expenses
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 cousins, other things remaining the same.
Annual operating expenses for DTH are 0.58%, which makes it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 4.58%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, China Mobile Ltd accounts for about 2.70% of the fund's total assets, followed by Novartis Ag (NOVN) and Nestle Sa (NESN).
Its top 10 holdings account for approximately 21.65% of DTH's total assets under management.
Performance and Risk
So far this year, DTH has added roughly 8.97%, and is down about -3.08% in the last one year (as of 03/29/2019). During this past 52-week period, the fund has traded between $36.10 and $44.81.
The ETF has a beta of 0.79 and standard deviation of 13.72% for the trailing three-year period, making it a medium risk choice in the space. With about 473 holdings, it effectively diversifies company-specific risk.
WisdomTree International High Dividend Fund is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI EAFE ETF (IEFA) tracks MSCI EAFE Investable Market Index and the iShares MSCI EAFE ETF (EFA) tracks MSCI EAFE Index. IShares Core MSCI EAFE ETF has $60.14 B in assets, iShares MSCI EAFE ETF has $63.36 B. IEFA has an expense ratio of 0.08% and EFA charges 0.31%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 International High Dividend Fund (DTH): ETF Research Reports
iShares MSCI EAFE ETF (EFA): ETF Research Reports
Novan Inc. (NOVN): Free Stock Analysis Report
iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.