Is WisdomTree U.S. LargeCap ETF (EPS) a Strong ETF Right Now?
Launched on 02/23/2007, the WisdomTree U.S. LargeCap ETF (EPS) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. EPS has been able to amass assets over $703.89 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. Earnings 500 Index.
The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock Market.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for EPS are 0.08%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.81%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 23.70% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.50% of total assets, followed by Alphabet Inc-Cl A (GOOGL) and Microsoft Corp (MSFT).
The top 10 holdings account for about 29.24% of total assets under management.
Performance and Risk
So far this year, EPS has added about 13.47%, and is up roughly 15.49% in the last one year (as of 07/06/2023). During this past 52-week period, the fund has traded between $38.39 and $46.81.
EPS has a beta of 1 and standard deviation of 17.38% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 501 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 1000 Value ETF (IWD) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $51.02 billion in assets, Vanguard Value ETF has $99.43 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
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.
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Get it free >>WisdomTree U.S. LargeCap ETF (EPS): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
