Pay Attention to Earnings-Based ETFs

Excluding the small-cap and mid-cap variations, these ETFs seem to be different shades of the same color.

Favorable Comparisons

My first inclination with these funds is to compare them with similar funds from WisdomTree's already existing dividend-weighted funds. It seems that most are comparable with at least one other fund. Given that this new batch of ETFs will correlate a little more closely to cap-weighted indices, I believe they'll be a little more growth-oriented than the dividend funds but still tilt toward the value end of the spectrum.

The Top 100 Earnings Fund seems to compare with the WisdomTree Dividend 100 Fund(DTN Quote) to capture large-cap value; both benchmark to the Russell 1000 Value Index. The back-test doesn't go as far back for EEZ as for DTN, but much to my surprise, the nod might go to the earnings fund, EEZ. For three years, EEZ's back-test outperforms the Russell 1000 Value Index by 2.93% annually, compared with just 0.98% average annual outperformance for DTN.

The one-year number shows a lag for EEZ, but for the length of the back-test, not quite five years, the average annual outperformance of EEZ over DTN is 2.84%.

The SmallCap Earnings Fund has some eye-popping numbers compared with the SmallCap Dividend Fund(DES Quote). Both funds outperform the Russell 2000 at every turn, but according to the back-test, EES fares better. It has better three-year numbers (17.59% return vs. 15.54%) and better (almost)-five-year numbers (19.14% vs. 18.23%), though EES' back-test did lag slightly for one year.