The WisdomTree SmallCap Dividend Index has a dividend yield of almost 3.3%. At a time when small-cap valuations are considered frothy, noteworthy is the 24.7 P/E ratio on DES, which while still above the S&P 500, is well below the P/E of almost 30 for IWM.

Focusing on dividends with small-caps does not mean investors have to sacrifice exposure to growth stocks. Just look at the WisdomTree U.S SmallCap Dividend Growth Fund (NasdaqGM: DGRS). The ten-month old DGRS is down just half a percent over the past 90 days.

DGRS tracks the WisdomTree U.S. SmallCap Dividend Growth Index, which yields 2.33%. The index is weighed by fundamental factors such as growth expectations, return on equity and return on assets, according to WisdomTree.

DGRS has a growth feel to it as consumer discretionary and technology names combine for 29% of the ETF’s weight. Like DES, DGRS pays a monthly dividend. DGRS is up 10.5% since its July 2013 debut, a performance that is superior to those offered by some more established small-cap ETFs over the same period. [Nifty New Dividend ETFs]

WisdomTree SmallCap Dividend Fund

Tom Lydon’s clients own shares of IWM.