Is WisdomTree U.S. Total Dividend ETF (DTD) a Strong ETF Right Now?

A smart beta exchange traded fund, the WisdomTree U.S. Total Dividend ETF (DTD) debuted on 06/16/2006, and offers broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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 $1.31 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the WisdomTree U.S. Dividend Index before fees and expenses.

The WisdomTree U.S. Dividend Index is a fundamentally-weighted index that defines the dividend-paying portion of the U.S. equity market.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.28%.

It has a 12-month trailing dividend yield of 2.18%.

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.

For DTD, it has heaviest allocation in the Financials sector --about 20.10% of the portfolio --while Information Technology and Consumer Staples round out the top three.

Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 3.13% of total assets, followed by Jpmorgan Chase & Co (JPM) and Johnson & Johnson (JNJ).

DTD's top 10 holdings account for about 22.91% of its total assets under management.

Performance and Risk

Year-to-date, the WisdomTree U.S. Total Dividend ETF has lost about -1.24% so far, and is up about 12.20% over the last 12 months (as of 05/01/2025). DTD has traded between $67.87 and $80.53 in this past 52-week period.

The ETF has a beta of 0.83 and standard deviation of 14.88% for the trailing three-year period, making it a medium risk choice in the space. With about 839 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree U.S. Total 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 $66.51 billion in assets, Vanguard Value ETF has $128.84 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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This article originally published on Zacks Investment Research (zacks.com).

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