Looking for broad exposure to the Mid Cap Value segment of the US equity market? You should consider the WisdomTree U.S. MidCap Dividend ETF (DON), a passively managed exchange traded fund launched on 06/16/2006.
The fund is sponsored by Wisdomtree. It has amassed assets over $3.01 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.
Why Mid Cap Value
Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don’t, including less risk and higher growth opportunities. Thus they have a nice balance of growth potential and stability.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.21%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector–about 27.20% of the portfolio. Industrials and Utilities round out the top three.
Looking at individual holdings, Antero Midstream Corp (AM) accounts for about 1.70% of total assets, followed by Franklin Resources Inc (BEN) and Interpublic Group Of Cos Inc (IPG).
The top 10 holdings account for about 11.7% of total assets under management.
Performance and Risk
DON seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index before fees and expenses. The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.
The ETF has gained about 26.40% so far this year and is up roughly 45.92% in the last one year (as of 10/28/2021). In the past 52-week period, it has traded between $29.44 and $44.02.
The ETF has a beta of 1.16 and standard deviation of 27.94% for the trailing three-year period, making it a medium risk choice in the space. With about 305 holdings, it effectively diversifies company-specific risk.
AlternativesWisdomTree U.S. MidCap Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DON is a reasonable option for those seeking exposure to the Style Box – Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.The iShares Russell MidCap Value ETF (IWS) and the Vanguard MidCap Value ETF (VOE) track a similar index. While iShares Russell MidCap Value ETF has $14.54 billion in assets, Vanguard MidCap Value ETF has $14.95 billion. IWS has an expense ratio of 0.23% and VOE charges 0.07%.Bottom-LineRetail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center . Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >> Click to get this free report WisdomTree U.S. MidCap Dividend ETF (DON): ETF Research Reports Franklin Resources, Inc. (BEN): Free Stock Analysis Report Interpublic Group of Companies, Inc. The (IPG): Free Stock Analysis Report Antero Midstream Corporation (AM): Free Stock Analysis Report Vanguard MidCap Value ETF (VOE): ETF Research Reports iShares Russell MidCap Value ETF (IWS): ETF Research Reports To read this article on Zacks.com click here. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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