A smart beta exchange traded fund, the WisdomTree International Equity ETF (DWM) debuted on 06/16/2006, and offers broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Wisdomtree, DWM has amassed assets over $561.24 million, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, DWM seeks to match the performance of the WisdomTree International Equity Index.
The WisdomTree International Equity Index is a fundamentally weighted Index that measures the performance of dividend-paying companies in the industrialized world, excluding Canada and the United States.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.48% for DWM, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.11%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Taking into account individual holdings, Hsbc Holdings Plc (HSBA) accounts for about 2.38% of the fund's total assets, followed by Novartis Ag (NOVN) and Toyota Motor Corp.
Its top 10 holdings account for approximately 12.57% of DWM's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree International Equity ETF has gained about 18.77% so far, and is up about 14.30% over the last 12 months (as of 05/22/2025). DWM has traded between $52.06 and $62.62 in this past 52-week period.
The ETF has a beta of 0.71 and standard deviation of 15.66% for the trailing three-year period, making it a low risk choice in the space. With about 1334 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree International Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares MSCI EAFE ETF (EFA) tracks MSCI EAFE Index and the iShares Core MSCI EAFE ETF (IEFA) tracks MSCI EAFE Investable Market Index. IShares MSCI EAFE ETF has $62.87 billion in assets, iShares Core MSCI EAFE ETF has $138.69 billion. EFA has an expense ratio of 0.32% and IEFA charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 International Equity ETF (DWM): ETF Research Reports iShares MSCI EAFE ETF (EFA): ETF Research Reports iShares Core MSCI EAFE ETF (IEFA): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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