Launched on 06/16/2006, the WisdomTree U.S. High Dividend ETF (DHS) 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?
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.
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.
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.
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.
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, and has been able to amass over $1.18 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, DHS seeks to match the performance of the WisdomTree U.S. High Dividend Index.
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.
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.
Operating expenses on an annual basis are 0.38% for DHS, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.70%.
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 in the Consumer Staples sector - about 21.40% 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).
Its top 10 holdings account for approximately 42.39% of DHS's total assets under management.
Performance and Risk
The ETF has lost about -0.33% so far this year and is up about 12.44% in the last one year (as of 04/24/2025). In the past 52-week period, it has traded between $83.01 and $100.58.
DHS has a beta of 0.69 and standard deviation of 15.35% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 377 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. High Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $65.52 billion in assets, Vanguard Value ETF has $126.91 billion. SCHD has an expense ratio of 0.06% 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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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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