Investors Have Been Exiting Large Cap Materials ETFs Lately

The coronavirus pandemic is allowing certain industries to thrive, such as telecommunications where businesses can take advantage of remote work options to overcome logistical challenges presented by social distancing. Some industries, however, could be face continued challenges as a result of the pandemic, such as the demand for materials—something that has been evident in the way investors have been exiting large cap materials exchange-traded funds (ETFs) as of late.

“Investors continued to redeem capital from ETFs seeking to replicate materials large cap stocks indices over yesterday’s market session, which recorded another wave of strong outflows (-$205,32M),” a Track Insight report noted. “It was the third consecutive session with outflows even though the segment bounced back by +3,89% over the day. Over the last 30 days, investors dumped close to $525M from the 10 ETFs of this segment, which is down 25,42% year-to-date. 10 ETFs tracking 7 indices are included in the segment for a total of $2,6Bn of assets under management.”

Where to Look

Nonetheless, it doesn’t mean that all is lost when it comes to the equities market. Investors can tilt their capital allocations into small cap, mid cap and large cap opportunities using a dividend screener to locate quality investments.

Here are a few funds that tilt towards quality and value that investors should put on their watch lists:

1. WisdomTree U.S. SmallCap Dividend Fund (NYSEArca: DES): seeks to track the price and yield performance, before fees and expenses, of the WisdomTree U.S. SmallCap Dividend Index. The index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the U.S. dividend-paying market.
2. WisdomTree U.S. MidCap Dividend Fund (NYSEArca: DON): seeks to track the price and yield performance, before fees and expenses, of the WisdomTree U.S. MidCap Dividend Index. The index is a fundamentally weighted index that is comprised of the mid-capitalization segment of the U.S. dividend-paying market.
3. WisdomTree U.S. LargeCap Dividend Fund (NYSEArca: DLN): seeks to track the price and yield performance, before fees and expenses, of the WisdomTree U.S. LargeCap Dividend Index. The index is a fundamentally weighted index that is comprised of the large-capitalization segment of the U.S. dividend-paying market.

For investors looking for international exposure, a fund to look at is the WisdomTree International Equity Fund (NSYEArca: DWM). DWM seeks to track the price and yield performance of the WisdomTree International Equity Index, which is a fundamentally weighted index that is comprised of companies in the industrialized world, excluding Canada and the United States, that pay regular cash dividends.

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