We have qualitatively reviewed this strategy and reaffirmed its Above Average Process and Average People ratings. The following text is from April 25, 2023.

WisdomTree US LargeCap Dividend ETF is a shrewd contrarian fund with bells and whistles that abate much of the risk associated with its rebalancing approach. Sound diversification and a low fee add to its appeal and solidify a Morningstar Analyst Rating of Silver. 

The WisdomTree LargeCap Dividend Index, which this fund fully replicates, puts a smart twist on a proven strategy. It weights 300 of the market’s largest dividend stocks by their projected cash dividends – a standard fundamental approach – then boosts those with the best combined quality and momentum characteristics by 50%. The extra layer of factor considerations should reduce exposure to stocks whose dividend policies conceal shaky fundamentals and/or negative momentum. It also helps the portfolio handily exceed the Russell 1000 Value Index in profitability metrics like return-on-invested capital. That indicates sound exposure to the quality factor, which has historically been tied to market-beating returns.

When this fund restores stocks’ dividend weights at each annual rebalance, it effectively doubles down on firms whose valuations have declined relative to their dividends and peers and trims exposure to the best performers. This contrarian approach pushes the fund into the large-value category, despite its scores of blend and growth holdings. While the fund may cling to some unworthy companies and prematurely cut ties with some winners, this buy-low-sell-high tack has paid off over time: the fund’s 8.82% annualized gain ranked within the top 20% of large-value peers over the 15 years through March 2023. 

Scanning the full value-growth spectrum helps this fund stay diversified. Sector- and holding-level constraints help prevent concentration at those levels, too. The top-10 holdings represented one-quarter of the portfolio as of March 2023, and no sector exceeded technology’s 17% portfolio weight.

This fund does not incorporate buffers but has reined in turnover effectively. Its annual turnover ratio ranked in the best quartile in each year for the past decade, leading to few transaction costs that come out of returns.

Analyst Rating

A sound dividend option.

Analyst

Ryan Jackson

Microsoft

Apple

JPMorgan Chase & Co

Exxon Mobil

Broadcom

AbbVie

Johnson & Johnson

Procter & Gamble

NVIDIA

Chevron

We have qualitatively reviewed this strategy and reaffirmed its Above Average Process rating. The following text is from April 25, 2023.

Quality and momentum considerations smooth over some drawbacks to this fund’s dividend-weighting approach, a time-tested strategy that unearths undervalued companies. Pairing that balance with sound diversification should translate to strong risk-adjusted performance, meriting an Above Average Process Pillar rating.

Above Average

Process

We have qualitatively reviewed this strategy and reaffirmed its Average People rating. The following text is from April 25, 2023.

A team at Mellon subadvises this portfolio. While the team has navigated a recent complete overhaul, Mellon’s solid index-tracking resources and global trading desk remain intact. It retains its Average People Pillar rating.

Marlene Walker-Smith was named Mellon’s head of equity index portfolio management following Tom Durante’s retirement in June 2021. She heads up a fresh roster of named managers on this fund; none of the current managers were listed on this fund before October 2020. Walker-Smith should prove ready for the task. She started with Mellon in 1995 and long served as a behind-the-scenes portfolio manager under Durante. Plus, her predecessor’s retirement was planned, allowing her to benefit from a comfortable transition.

Each of the four managers that report to Walker-Smith—David France, Todd Frysinger, Vlasta Sheremeta, and Michael Stoll—are backed by an associate portfolio manager and at least one index analyst. This support should help the managers focus on tax efficiency and carve out other advantages at the margin. Manager compensation is not tied to index tracking performance. However, the management team is subject to independent risk oversight from both Mellon and WisdomTree.

Average

People

WisdomTree is improving, but its shaky global fund lineup and uncertain trajectory hold its rating to Below Average. 

WisdomTree’s research organization has long been a strength. Under CIO Jeremy Schwartz, the team has generated creative, economically sound ideas and evolved them into investable products, like the efficient core series. A recent focus on investor education spawned the Portfolio Analysis Tools Hub, an online platform that taps the team’s brainpower to help investors make better investment decisions.

The firm’s product lineup is a mixed bag. To complement its core lineup of fundamentally weighted strategies, WisdomTree has recently launched funds targeting established factors instead of trendy themes—an encouraging reorientation. Yet the shutdown of WisdomTree U.S. Growth and Momentum ETF calls WisdomTree’s commitment to these funds into question, and vestiges from its laxer product-development era look ripe for closure. Its European lineup features risky trading tools that are hard for investors to use well. 

WisdomTree’s future may hinge on WisdomTree Prime, its blockchain-based digital wallet. The launch reflects founder and CEO Jonathan Steinberg’s conviction in the disruptive potential of the blockchain. Prime shouldn’t hurt WisdomTree fund investors (most funds on the platform are zero-fee), but it may distract the firm from shoring up its core offering.

Below Average

Parent

WisdomTree U.S. LargeCap Dividend Fund

DLN tracks a dividend-weighted index of the 300 largest dividend-paying US companies.

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With stocks trading near their all-time highs as the economy continues to bounce back from the pandemic lows of 2020, Wednesday represents a special day for equity traders and stock index ETF investors: the 125th birthday of the Dow Jones Industrial Average. The Dow Jones, which debuted over a century ago with just 12 members, [.

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ETFs offer better tax efficiency, greater transparency and lower risk, offering an advantage over traditional stocks that carry more risk. The post 7 Great ETFs to Buy to Ride Out Rough Seas appeared first on InvestorPlace.

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News for WisdomTree U.S. LargeCap Dividend Fund ETF (DLN)