Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the WisdomTree U.S. Total Dividend ETF (DTD), a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $1.08 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
While 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. 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
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.
Annual operating expenses for this ETF are 0.28%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.30%.
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.
This ETF has heaviest allocation to the Healthcare sector--about 15.90% of the portfolio. Financials and Consumer Staples round out the top three.
Looking at individual holdings, Microsoft Corp (MSFT) accounts for about 3.95% of total assets, followed by Apple Inc (AAPL) and Exxon Mobil Corp (XOM).
The top 10 holdings account for about 25.42% of total assets under management.
Performance and Risk
DTD 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.
The ETF has lost about -3.11% so far this year and is up roughly 7.86% in the last one year (as of 05/27/2022). In the past 52-week period, it has traded between $57.80 and $65.68.
The ETF has a beta of 0.92 and standard deviation of 22.40% for the trailing three-year period, making it a medium risk choice in the space. With about 644 holdings, it effectively diversifies company-specific risk.