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WisdomTree: Dividend ETFs Trump Russell 1000


WisdomTree Investments, Inc. (NASDAQ:WETF)’s Director of Research, Jeremy Schwartz, along with Christopher Gannatti, and Chris Jabara , Research Analysts, in their study, have exhibited that investing in dividend paying stocks helps in reducing volatilit. Additionally, they have been able to illustrate that WisdomTree’s two ETFs outperformed various other ETFs during the last three years, due to the same fact.

WisdomTree: Dividend ETFs Trump Russell 1000

The letter focuses on two WisdomTree Investments, Inc. (NASDAQ:WETF) ETFs. First,WisdomTree Equity Income Fund (ETF) (NYSE:DHS), which tracks the WisdomTree equity Income Index, and seeks to measure the performance of the 30% highest yielding dividend paying stocks within the WisdomTree Dividend Index. Second, WisdomTree Dividend ex-Financials Fund (NYSE:DTN), which seeks to measure the performance of high dividend yielding equities, by tracking WisdomTree Dividend ex-Financials Index.

The first ETFs capitalizes on cheaply priced dividend payers, and over the last year, the fund’s return YTD stood at 9.20%, as compared to Russell 1000 Value index’s 8.68%, while the 1-Year and 3-Year rates were 14.89% and 23.08%, and 3.01% and 15.08% respectively, representing a consistently better performance for the WisdomTree ETF, as compared to Russell 1000 ETF.

The WisdomTree Dividend ex-Fin Fund (ETF) (NYSE:DTN), has not be fairing as well, over the last two years. However, it has a net return of 5% since inception, as compared to Dow’s 2.87%.

WisdomTree Equity Income Fund (ETF) (NYSE:DHS) has been improving year on year since inception, when compared with its peers. The ETF beat 67% of its peers on average, between July 1, 2006 and June 30, 2012.

WisdomTree Equity Capital Fund (DHS)’s amazing performance is also illustrated when the various weights are taken into the equation. Despite holding the lesser of the weights, its performance is such that it contributes almost double the return of the Russell 1000 performance, through the entire period. For instance 1-Year period, 10.28% against -2.93%; 3-Year, 23.09% against 8.87%, and 5-Year -7.34% against -13.75%.


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