As for DTH, it does share some similarities with EFA, though it is not an exact replica. For example, Japan is not a great dividend destination compared to the U.S. or some European countries. DTH features just a 4.1% weight to the world’s third-largest economy compared to 21.6% in EFA. The U.K., Australia and France combine for 54% of DTH’s weight.
Like many of the WisomTree dividend ETFs investors are already familiar with, DTH tracks an index that weighs its components based on annual cash dividends paid. Over the past three years, the WisdomTree DEFA Equity Income Index has slightly outperformed the MSCI EAFE Value Index, according to WisdomTree data.
Eurozone nations combine for about 34% of DTH’s weight. Like EFA, DTH is meaningfully allocated to the financial services sector, one of the drivers behind the recent success of European equities. DTH has a 25% weight to that group followed by telecom at 15.1% and energy at 11.5%.
DTH’s lack of Japan exposure has not adversely affected the fund this year as it has performed inline with EFA with both gaining nearly 11%. The WisdomTree fund has had a beta of 1.05 against the MSCI EAFE Index since inception in mid-2006. However, DTH does feature the superior dividend yield and had a P/E ratio of 14.1 at the end of the second quarter. EFA’s current P/E is 21.
WisdomTree DEFA Equity Income Fund
ETF Trend editorial team contributed to this post. Tom Lydon’s clients own shares of EFA.