DES offers another advantage: Some protection against rising interest rates in the form of a combined 38.2% weight to the industrial, consumer discretionary and technology sectors, the three best-performing sectors in rising rate environments. Not to mention, consumer discretionary and tech have been two of the largest contributors to U.S. dividend growth in recent years. [Getting Big Dividend Growers With ETFs]
Speaking interest rates, nearly two-thirds of the WisdomTree Small-Cap Index yields more than 10-year U.S. Treasuries. That is more than double the weight of the S&P 500 that yields more than 10-years, according to WisdomTree data.
DES also serves as proof that dividends do work with small-caps as the ETF has outpaced the Russell 2000 by a wide margin over the past three years while being 360 basis points less volatile. DES charges 0.38% per year and pays a monthly dividend.
WisdomTree SmallCap Dividend Fund
Tom Lydon’s clients own shares of IWM.