This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

WisdomTree High-Yield ETF Stands Apart

The 20 new WisdomTree exchange-traded funds are causing quite a buzz in the ETF world. The big macro idea of the funds, which were launched in June, is to emphasize dividends rather than market cap in determining components.

WisdomTree, which has another 10 ETFs in the pipeline, has mountains of research providing evidence that dividend-paying stocks outperform the rest of the market over long periods of time.

Among WisdomTree's offerings were the first ETFs tracking foreign high-yielding equity funds. But one of the funds that caught my eye was the domestic-based WisdomTree High-Yielding Equity Fund (DHS), or DHS.

The fund's holdings and concept are similar to the other large-cap dividend ETFs, including the iShares Dow Jones Select Dividend Index (DVY) fund and the streetTRACKS SPDR Dividend (SDY) ETF. But DHS's top-heavy weighting and sector makeup are big variables in evaluating the fund compared with the others.

The specific objective of the underlying WisdomTree index is to screen for dividend-paying stocks with market caps of at least $200 million and average daily dollar volume of $200,000. From there, the top 30% in terms of yield are included in the index. The prospectus says the companies are weighted based on their projected cash dividends as of the date the calculation is done.

DHS is loaded with mega-cap stocks like Bank of America (BAC - Get Report), at 6.8% of the fund, Citigroup (C - Get Report) at 6.4% and General Electric (GE - Get Report) with a 6.2% weighting. The top 10 actually accounts for 44.5% of the fund, which may draw some criticism considering that SDY has 28.1% of its weight in its top 10 and DVY has just 26%. The issue here, if there is one, is that having top holdings with 6% weights instead of 3% makes DHS more susceptible to single-stock risk.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $16.75 0.00%
C $54.97 0.00%
DHS $61.57 0.00%
DVY $79.04 0.00%
GE $27.68 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs