Launched on 06/16/2006, the WisdomTree U.S. High Dividend ETF (DHS) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Wisdomtree. It has amassed assets over $1.16 billion, 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
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
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 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 3.78%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Consumer Staples sector--about 21.30% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Philip Morris International Inc (PM) accounts for about 5.83% of total assets, followed by Johnson & Johnson (JNJ) and Exxon Mobil Corp (XOM).
The top 10 holdings account for about 42.39% 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 lost about -2.42% so far this year and is up about 14.64% in the last one year (as of 04/17/2025). In the past 52-week period, it has traded between $82.57 and $100.58.
The ETF has a beta of 0.69 and standard deviation of 15.34% for the trailing three-year period, making it a medium risk choice in the space. With about 377 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. High Dividend ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, DHS is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $64.73 billion in assets, Vanguard Value ETF has $125.10 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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 Johnson & Johnson (JNJ): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Philip Morris International Inc. (PM): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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