Is WisdomTree International High Dividend Fund (DTH) a Strong ETF Right Now?
The WisdomTree International High Dividend Fund (DTH) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. DTH has been able to amass assets over $226.56 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for DTH are 0.58%, which makes it one of the more expensive products in the space.
The fund has a 12-month trailing dividend yield of 4.53%.
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.
When you look at individual holdings, Bp Plc (BP/) accounts for about 2.48% of the fund's total assets, followed by China Mobile Ltd and Royal Dutch Shell Plc Class A (RDSA).
DTH's top 10 holdings account for about 18.55% of its total assets under management.
Performance and Risk
The ETF has added roughly 4.69% so far this year and is down about -4.17% in the last one year (as of 08/14/2019). In the past 52-week period, it has traded between $36.10 and $42.54.
The ETF has a beta of 0.78 and standard deviation of 11.48% for the trailing three-year period, making it a medium risk choice in the space. With about 490 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 MSCI EAFE ETF (EFA) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA) tracks MSCI EAFE Investable Market Index. IShares MSCI EAFE ETF has $58.34 B in assets, iShares Core MSCI EAFE ETF has $62.96 B. EFA has an expense ratio of 0.31% and IEFA charges 0.07%.
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
iShares Core MSCI EAFE ETF (IEFA): ETF Research Reports
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