The WisdomTree International Hedged Quality Dividend Growth ETF (IHDG) was launched on 05/07/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $588.26 M, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree International Hedged Quality Dividend Growth Index.
The WisdomTree International Hedged Quality Dividend Growth Index is designed to provide exposure to the developed market companies while at the same time neutralizing exposure to fluctuations between the value of foreign currencies and the U.S. dollar.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.58%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.37%.
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.
When you look at individual holdings, Industria De Diseno Textil (ITX) accounts for about 4.52% of the fund's total assets, followed by Novo Nordisk A/s (NOVOB) and British American Tobacco Plc (BATS).
IHDG's top 10 holdings account for about 30.89% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree International Hedged Quality Dividend Growth ETF has lost about -16.10% so far, and is down about -0.78% over the last 12 months (as of 03/10/2020). IHDG has traded between $30.48 and $37.66 in this past 52-week period.
The fund has a beta of 0.80 and standard deviation of 12.39% for the trailing three-year period, which makes IHDG a medium risk choice in this particular space. With about 538 holdings, it effectively diversifies company-specific risk.
WisdomTree International Hedged Quality Dividend Growth ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $9.20 B in assets, Vanguard Dividend Appreciation ETF has $36.99 B. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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.
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WisdomTree International Hedged Quality Dividend Growth ETF (IHDG): ETF Research Reports
iShares Core Dividend Growth ETF (DGRO): ETF Research Reports
Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
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