“DLN beat almost 99% of active managers in 2011—a much higher percentage than either of its market capitalization-weighted benchmarks. Focusing on dividends during this period led to a less than 10% average weight to Financials, a sector that tended to be much more heavily represented within the market capitalization-weighted benchmarks. Within both of these benchmark Indexes, Financials was one of the worst-performing sectors during this period, so DLN’s under-weight to this sector was helpful to relative returns,” said Schwartz.
As financial services dividends have recovered since the global financial crisis, the sector is now the third-largest in DLN at nearly 14% of the fund’s weight.
The ETF’s dividend growth potential is further buoyed by a nearly 18% weight to the technology sector. That includes Apple (NasdaqGS: AAPL) as the ETF’s largest holding and Dow components Microsoft (NasdaqGS: MSFT) and Intel (NasdaqGS: INTC) among the top 10 holdings.
WisdomTree LargeCap Dividend Fund
Tom Lydon’s clients own shares of Apple.