“Compared with passive management, smart beta promises enhanced returns over cap-weighted benchmarks. Compared with active management, it offers potential returns over traditional indices at a lower cost with greater transparency,” notes Moody’s.
The note did not mention WisdomTree (NasdaqGS: WETF), the fifth-largest U.S. ETF sponsor and one of the largest issuers of intelligent index funds. Data from First Bridge show dividend and fundamentally ETFs are the largest smart beta segment with $54.1 billion in combined assets as of Feb. 28.
Should that number continue growing, that should benefit WisdomTree as the firm is one of the largest issuers of dividend ETFs. Popular dividend ETFs from WisdomTree include the $3.8 billion WisdomTree Emerging Markets Equity Income Fund (NYSEArca: DEM) and the $1.8 billion WisdomTree LargeCap Dividend Fund (NYSEArca: DLN). Shares of WisdomTree are up 43% over the past two years. [Revisiting a Familiar Dividend ETF]
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of DEM.