Should WisdomTree U.S. SmallCap Dividend ETF (DES) Be on Your Investing Radar?

If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the WisdomTree U.S. SmallCap Dividend ETF (DES), a passively managed exchange traded fund launched on 06/16/2006.The fund is sponsored by Wisdomtree. It has amassed assets over $1.98 billion, making it one of the larger ETFs attempting to match the Small Cap Value segment of the US equity market.Why Small Cap ValueSitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.CostsExpense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 2.86%.Sector Exposure and Top HoldingsEven 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.This ETF has heaviest allocation to the Financials sector--about 24.80% of the portfolio. Consumer Discretionary and Industrials round out the top three.Looking at individual holdings, Sabra Health Care Reit Inc (SBRA) accounts for about 1.04% of total assets, followed by Kinetik Holdings Inc (KNTK) and Spire Inc (SR).The top 10 holdings account for about 9.24% of total assets under management.Performance and RiskDES seeks to match the performance of the WisdomTree U.S. SmallCap Dividend Index before fees and expenses. The WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the US dividend-paying market.The ETF has lost about -1.67% so far this year and is up about 11.05% in the last one year (as of 02/24/2025). In the past 52-week period, it has traded between $30.34 and $37.69.The ETF has a beta of 1.10 and standard deviation of 19.98% for the trailing three-year period, making it a medium risk choice in the space. With about 592 holdings, it effectively diversifies company-specific risk.AlternativesWisdomTree U.S. SmallCap Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DES is a sufficient option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.The Avantis U.S. Small Cap Value ETF (AVUV) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While Avantis U.S. Small Cap Value ETF has $15.61 billion in assets, Vanguard Small-Cap Value ETF has $30.99 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.Bottom-LineRetail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report WisdomTree U.S. SmallCap Dividend ETF (DES): ETF Research Reports Sabra Healthcare REIT, Inc. (SBRA): Free Stock Analysis Report Spire Inc. (SR): Free Stock Analysis Report Vanguard Small-Cap Value ETF (VBR): ETF Research Reports Avantis U.S. Small Cap Value ETF (AVUV): ETF Research Reports Kinetik Holdings Inc. (KNTK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks