Making its debut on 02/23/2007, smart beta exchange traded fund WisdomTree U.S. SmallCap ETF (EES) provides investors broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $662.23 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Value. EES is managed by Wisdomtree. EES, before fees and expenses, seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index.
The WisdomTree U.S. SmallCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the small-capitalization segment of the U.S. Stock Market.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.38%.
EES's 12-month trailing dividend yield is 1.22%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 23.3% of the portfolio, the fund has heaviest allocation to the Financials sector; Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Venture Global Inc-cl A (VG) accounts for about 1.16% of the fund's total assets, followed by Matson Inc (MATX) and Crescent Energy Inc-a (CRGY).
EES's top 10 holdings account for about 6.42% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree U.S. SmallCap ETF has added roughly 5.43% so far, and is up roughly 15.13% over the last 12 months (as of 02/25/2026). EES has traded between $42.54 $61.30 in this past 52-week period.
EES has a beta of 1.06 and standard deviation of 21.15% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 909 holdings, it effectively diversifies company-specific risk .
Alternatives
WisdomTree U.S. SmallCap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Russell 2000 Value ETF (IWN) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR) tracks CRSP U.S. Small Cap Value Index. iShares Russell 2000 Value ETF has $13.05 billion in assets, Vanguard Small-Cap Value ETF has $34.38 billion. IWN has an expense ratio of 0.24% and VBR changes 0.05%.
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 - Small 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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WisdomTree U.S. SmallCap ETF (EES): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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