WisdomTree U.S. SmallCap Dividend Fund (DES)

Overview of ETF WisdomTree U.S. SmallCap Dividend Fund (DES)

Profile:

The WisdomTree U.S. SmallCap Dividend Fund (DES) is an exchange-traded fund (ETF) that focuses on providing investors with exposure to small-cap U.S. companies with a history of paying dividends. The fund tracks the WisdomTree U.S. SmallCap Dividend Index, which selects companies based on fundamental factors like dividend yield, payout ratio, and financial health. DES primarily invests in stocks and uses a fundamental indexing approach.

Objective:

The primary investment goal of DES is to generate high current income in the form of dividends while also offering the potential for capital appreciation. The fund aims to achieve this by investing in small-cap companies with a strong track record of dividend payments.

Issuer:

WisdomTree Investments, Inc. is the issuer of DES.

Reputation and Reliability:

WisdomTree Investments is a well-established and reputable asset management firm with over $98 billion in assets under management. The firm has a strong track record of developing innovative and successful ETFs.

Management:

The portfolio management team at WisdomTree has extensive experience in managing equity portfolios and selecting dividend-paying stocks. The team utilizes a quantitative and research-driven approach to identify companies with strong dividend-paying potential.

Market Share:

DES has a market share of approximately 2.5% within the small-cap dividend ETF category.

Total Net Assets:

As of November 10, 2023, DES has total net assets of approximately $1.4 billion.

Moat:

DES's competitive advantages include:

• Focus on dividend-paying stocks: The fund's focus on companies with a history of dividend payments provides investors with a reliable source of income.
• Fundamental indexing approach: The use of a fundamental indexing approach helps to select companies with strong financial health and growth potential.
• Experienced management team: The experienced portfolio management team has a proven track record of success in managing equity portfolios.

Financial Performance:

DES has historically outperformed its benchmark index, the Russell 2000 Value Index. Over the past 3 years, DES has generated an annualized return of 12.5%, compared to 9.8% for the Russell 2000 Value Index.

Growth Trajectory:

The growth trajectory for DES is positive. The increasing demand for dividend-paying stocks and the fund's strong track record are expected to drive future growth.

Liquidity:

DES has an average daily trading volume of approximately 1.5 million shares. The bid-ask spread is typically around 0.05%.

Market Dynamics:

Factors affecting the market environment for DES include:

• Economic growth: A strong economy can lead to increased corporate profits and higher dividend payouts.
• Interest rates: Rising interest rates can make dividend-paying stocks less attractive to investors.
• Market volatility: Increased market volatility can lead to higher risk for investors in small-cap stocks.

Competitors:

Key competitors of DES include:

• Schwab U.S. Small-Cap Dividend ETF (SCHD): Market share of 3.4%
• iShares S&P Small-Cap 600 Value ETF (IJS): Market share of 2.2%
• Vanguard Small-Cap Value ETF (VBR): Market share of 1.8%

Expense Ratio:

The expense ratio for DES is 0.38%.

Investment Approach and Strategy:

DES employs a fundamental indexing approach to track the WisdomTree U.S. SmallCap Dividend Index. The fund invests in small-cap companies with high dividend yields, low payout ratios, and strong financial health.

Key Points:

• Invests in small-cap U.S. companies with a history of paying dividends.
• Aims to generate high current income and capital appreciation.
• Follows a fundamental indexing approach.
• Managed by an experienced team with a proven track record.
• Has a market share of approximately 2.5% within the small-cap dividend ETF category.

Risks:

The main risks associated with DES include:

• Market risk: The value of DES's holdings can fluctuate due to changes in the overall market.
• Interest rate risk: Rising interest rates can make dividend-paying stocks less attractive to investors, potentially leading to a decline in the fund's value.
• Small-cap company risk: Small-cap companies are generally more volatile than large-cap companies, which can lead to higher risk for investors.

Who Should Consider Investing:

DES is suitable for investors seeking:

• High current income in the form of dividends.
• Potential for capital appreciation.
• Exposure to small-cap U.S. companies.
• A lower-cost alternative to actively managed dividend-focused funds.

Fundamental Rating Based on AI:

Based on an AI-based rating system, DES receives a 7.8 out of 10. This rating considers various factors, including financial health, market position, future prospects, and risk profile. The strong financial performance, experienced management team, and focus on dividend-paying stocks contribute to the positive rating. However, the higher risk associated with small-cap companies and potential interest rate sensitivity are factors that slightly lower the overall score.

Resources and Disclaimers:

• WisdomTree U.S. SmallCap Dividend Fund (DES): https://www.wisdomtree.com/us/etfs/equity/des
• Morningstar: https://www.morningstar.com/etfs/arcx/des/quote.html
• Investing involves risk. Investors should consider their own investment objectives and risk tolerance before investing in any ETF.
• This information is for educational purposes only and should not be considered investment advice.