Launched on 06/16/2006, the WisdomTree International Equity ETF (DWM) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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.
The fund is sponsored by Wisdomtree. It has amassed assets over $514.36 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.
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.77%.
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Hsbc Holdings Plc (HSBA) accounts for about 1.85% of total assets, followed by Novartis Ag (NOVN) and Totalenergies (TTE).
Its top 10 holdings account for approximately 12.7% of DWM's total assets under management.
So far this year, DWM has added about 5.52%, and is up about 12.74% in the last one year (as of 11/15/2024). During this past 52-week period, the fund has traded between $49.26 and $58.10.
The ETF has a beta of 0.81 and standard deviation of 15.57% for the trailing three-year period, making it a low risk choice in the space. With about 1040 holdings, it effectively diversifies company-specific risk.
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 $53.97 billion in assets, iShares Core MSCI EAFE ETF has $118.64 billion. EFA has an expense ratio of 0.33% 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.
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 Reports
TotalEnergies SE Sponsored ADR (TTE) : Free Stock Analysis Report
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