Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree International Equity ETF (DWM) provides investors 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
The fund is sponsored by Wisdomtree. It has amassed assets over $501.23 million, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund 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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for DWM are 0.48%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.83%.
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 2.33% of total assets, followed by Novartis Ag (NOVN) and Toyota Motor Corp.
DWM's top 10 holdings account for about 12.23% of its total assets under management.
The ETF has gained about 0.64% and is up roughly 5.30% so far this year and in the past one year (as of 01/16/2025), respectively. DWM has traded between $50.94 and $58.10 during this last 52-week period.
DWM has a beta of 0.80 and standard deviation of 15.47% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1341 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 $53.48 billion in assets, iShares Core MSCI EAFE ETF has $118.56 billion. EFA has an expense ratio of 0.32% 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
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