The WisdomTree International Equity ETF (DWM) made its debut on 06/16/2006, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
The fund is managed by Wisdomtree, and has been able to amass over $534.04 million, which makes 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.
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 3.42%.
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 2.46% of total assets, followed by Novartis Ag (NOVN) and Toyota Motor Corp.
DWM's top 10 holdings account for about 12.67% of its total assets under management.
So far this year, DWM has gained about 12.72%, and is up about 11.53% in the last one year (as of 03/21/2025). During this past 52-week period, the fund has traded between $52.19 and $59.86.
The fund has a beta of 0.79 and standard deviation of 14.97% for the trailing three-year period, which makes DWM a low risk choice in this particular space. With about 1324 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 $59.14 billion in assets, iShares Core MSCI EAFE ETF has $131.70 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
This article originally published on Zacks Investment Research (zacks.com).
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