Should WisdomTree U.S. High Dividend ETF (DHS) Be on Your Investing Radar?
Style Box ETF report for DHS
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the WisdomTree U.S. High Dividend ETF (DHS), a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $846.97 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.99%.
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.
This ETF has heaviest allocation to the Consumer Staples sector--about 19.60% of the portfolio. Financials and Healthcare round out the top three.
Looking at individual holdings, Philip Morris International Inc (PM) accounts for about 5.46% of total assets, followed by Altria Group Inc (MO) and Abbvie Inc (ABBV).
The top 10 holdings account for about 43.86% of total assets under management.
Performance and Risk
DHS seeks to match the performance of the WisdomTree U.S. High Dividend Index before fees and expenses. The WisdomTree U.S. High Dividend Index is a fundamentally weighted index that measures the performance of companies with high dividend yields selected from the WisdomTree Dividend Index.
The ETF has gained about 21.62% so far this year and is up roughly 22.14% in the last one year (as of 12/22/2021). In the past 52-week period, it has traded between $68.47 and $82.03.
The ETF has a beta of 0.89 and standard deviation of 21.91% for the trailing three-year period, making it a medium risk choice in the space. With about 314 holdings, it effectively diversifies company-specific risk.
WisdomTree U.S. High Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DHS is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $58.24 billion in assets, Vanguard Value ETF has $90.44 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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 U.S. High Dividend ETF (DHS): ETF Research Reports
Altria Group, Inc. (MO): Free Stock Analysis Report
Philip Morris International Inc. (PM): Free Stock Analysis Report
AbbVie Inc. (ABBV): Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
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