Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the WisdomTree U.S. SmallCap Dividend ETF (DES) is a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $1.76 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
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. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value 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 3.24%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 26.10% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Laclede Group Inc/the (LG) accounts for about 1.33% of total assets, followed by Sabra Health Care Reit Inc (SBRA) and Northwestern Energy Group Inc (NWE).
The top 10 holdings account for about 10.39% of total assets under management.
Performance and Risk
DES seeks to match the performance of the WisdomTree U.S. SmallCap Dividend Index before fees and expenses. The WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the US dividend-paying market.
The ETF has lost about -11.97% so far this year and is down about -0.74% in the last one year (as of 04/28/2025). In the past 52-week period, it has traded between $28.02 and $37.69.
The ETF has a beta of 0.99 and standard deviation of 20.79% for the trailing three-year period, making it a medium risk choice in the space. With about 585 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. SmallCap 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, DES is an outstanding option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Avantis U.S. Small Cap Value ETF (AVUV) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Avantis U.S. Small Cap Value ETF has $14.02 billion in assets, Vanguard Small-Cap Value ETF has $27.27 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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. SmallCap Dividend ETF (DES): ETF Research Reports Sabra Healthcare REIT, Inc. (SBRA): Free Stock Analysis Report NorthWestern Corporation (NWE): Free Stock Analysis Report Vanguard Small-Cap Value ETF (VBR): ETF Research Reports Avantis U.S. Small Cap Value ETF (AVUV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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