WisdomTree U.S. SmallCap Quality Dividend Growth Fund (DGRS)

ETF WisdomTree U.S. SmallCap Quality Dividend Growth Fund (DGRS)

Profile:

DGRS is an actively managed ETF that focuses on investing in small-cap U.S. companies with a strong track record of dividend growth and quality fundamentals. The fund uses a quantitative approach to select stocks with high dividend yields, low payout ratios, and strong earnings growth potential. It primarily invests in financials, industrials, and consumer discretionary sectors.

Objective:

The primary objective of DGRS is to provide investors with a high level of current income and the potential for long-term capital appreciation through investments in small-cap U.S. companies with a history of dividend growth.

Issuer:

• WisdomTree Investments, Inc.: A leading provider of exchange-traded funds (ETFs) with over $79 billion in assets under management.
• Reputation and Reliability: WisdomTree has a strong reputation for offering innovative and transparent investment solutions. It has received numerous awards and accolades for its products and services.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in small-cap investing and quantitative analysis.

Market Share:

DGRS has a market share of approximately 1.5% in the small-cap dividend growth ETF category.

Total Net Assets:

As of October 26, 2023, DGRS has total net assets of approximately $1.2 billion.

Moat:

• Active Management: DGRS utilizes active management, which allows the portfolio managers to select the best performing stocks within the small-cap universe.
• Quantitative Approach: The fund's quantitative approach helps to identify high-quality companies with strong dividend growth potential.
• Focus on Small-Cap: Small-cap companies have the potential for higher growth than large-cap companies, which can lead to enhanced returns.

Financial Performance:

• Year-to-Date: DGRS has returned approximately 12% year-to-date, outperforming the Russell 2000 Growth Index, which returned 7%.
• Since Inception (2016): DGRS has generated an annualized return of 12.2%, exceeding the Russell 2000 Growth Index's return of 10.8%.

Growth Trajectory:

The small-cap market is expected to continue to grow in the coming years, driven by the strong economic recovery and increased investor interest in this segment. This bodes well for DGRS's future growth prospects.

Liquidity:

• Average Daily Trading Volume: Approximately 350,000 shares
• Bid-Ask Spread: 0.04%

Market Dynamics:

• Economic Indicators: A strong economy and low interest rates support the growth of small-cap companies.
• Sector Growth Prospects: The financials, industrials, and consumer discretionary sectors are expected to benefit from the economic recovery.
• Current Market Conditions: Market volatility may present opportunities for active management to outperform the benchmark.

Competitors:

• iShares S&P Small-Cap 600 Value ETF (IJS) - 2.5% market share
• Vanguard Small-Cap Value ETF (VBR) - 2.3% market share
• SPDR S&P 600 Small Cap Value ETF (SLYV) - 2.1% market share

Expense Ratio: 0.38%

Investment Approach and Strategy:

• Strategy: Active management focusing on small-cap U.S. stocks with a history of dividend growth.
• Composition: Primarily invests in stocks with high dividend yields, low payout ratios, and strong earnings growth potential. The fund may also hold a small allocation to fixed income securities.

Key Points:

• High dividend yield with potential for dividend growth.
• Focus on quality small-cap companies with strong fundamentals.
• Actively managed with a quantitative approach.
• Strong track record of outperformance.

Risks:

• Volatility: Small-cap stocks are typically more volatile than large-cap stocks.
• Market Risk: The overall market performance can impact the value of the fund's holdings.
• Interest Rate Risk: Rising interest rates can make fixed income investments less attractive.

Who Should Consider Investing:

• Investors seeking current income and long-term capital appreciation.
• Investors who believe in the potential of small-cap stocks.
• Investors who are comfortable with a higher level of risk.

Fundamental Rating Based on AI:

8.5/10

DGRS receives a high rating based on its strong financial performance, active management, and focus on quality small-cap companies. The fund has a solid track record of outperforming its benchmark and offers a compelling combination of income and growth potential. However, investors should be aware of the risks associated with small-cap investing and market volatility.

Resources and Disclaimers:

• WisdomTree website: https://www.wisdomtree.com/us/etfs/equity/dgrs
• Morningstar: https://www.morningstar.com/etfs/arcx/dgrs/overview
• ETF.com: https://www.etf.com/etf-profile/equity/dgrs

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.