It’s no secret that advisors and investors have gravitated to value in 2022 as the biggest growth stocks have plummeted from last year’s November highs. With the S&P 500 on its way to the worst first half of the year in 52 years and the Nasdaq Composite likely rounding out the first half of 2022 as the worst on record according to MarketWatch, money has moved from the growth drivers of the last decade to the more predictable performance offered by value.
“Now this market has flipped on a dime,” said Jeff Weniger, CFA and head of equity strategy at WisdomTree, on a call earlier this month with VettaFi. “DHS and the cousin in emerging markets, DEM, are two of the deepest value mandates of the 80 or 90 ETFs” that WisdomTree offers, Weniger explained.
Indeed, it’s something that advisors and investors have taken note of, particularly in the pivot to dividends that has happened as well. The WisdomTree U.S. High Dividend Fund (DHS) has experienced net flows of $271.87 million year-to-date per FactSet, while the WisdomTree Emerging Markets High Dividend Fund (DEM) has experienced net flows of $284.85 million YTD per FactSet.
“The two factors that have worked the best this year have been value and dividends and… You can get that in extremes in DHS,” said Scott Welch, CIMA, and CIO of model portfolios at WisdomTree, on the same call. “Give me the most you have of those two things: well, that’s DHS,” for the U.S. and DEM for emerging markets.
The Ultimate Value and Dividend Play With WisdomTree
The WisdomTree U.S. High Dividend Fund (DHS) invests in high dividend-yielding U.S. equity companies and seeks to track the WisdomTree U.S. High Dividend Index. The index contains the top 30% of companies by dividend yield from the WisdomTree U.S. Dividend Index, and the index is dividend-weighted based on projected dividends for the next year.
The fund invests 95% of its assets in the securities of the index and securities that are essentially identical in their economic characteristics under normal circumstances. Sector representation is capped at a 25% weight (real estate is capped at 5%), and individual securities are capped at a 5% weight in the index.
DHS has an expense ratio of 0.38%.
The WisdomTree Emerging Markets High Dividend Fund (DEM) invests in high dividend-yielding emerging market companies and seeks to track the WisdomTree Emerging Markets Dividend Index. The index is fundamentally weighted and contains the top 30% of companies by dividend yield, and the index is dividend-weighted based on dividends paid in the previous year.
Sectors and countries are capped at a 25% weight within the index (real estate is capped at 15%), with individual securities capped at 5%.
The fund invests 95% of its assets in the securities of the index and securities that are essentially identical in their economic characteristics under normal circumstances.
DEM has an expense ratio of 0.63%
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