The WisdomTree International Hedged Quality Dividend Growth ETF (IHDG) made its debut on 05/07/2014, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies–popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
IHDG is managed by Wisdomtree, and this fund has amassed over $996.37 million, which makes it one of the larger ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the WisdomTree International Hedged Quality Dividend Growth Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.58% for this ETF, which makes it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 2.13%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
When you look at individual holdings, Rio Tinto Plc (RIO) accounts for about 6.49% of the fund's total assets, followed by Bhp Group Ltd (BHP) and Unilever Plc (ULVR).
IHDG's top 10 holdings account for about 42.88% of its total assets under management.
Performance and Risk
The ETF has added roughly 11.19% so far this year and it's up approximately 27.24% in the last one year (as of 06/11/2021). In the past 52-week period, it has traded between $34.53 and $43.99.
The ETF has a beta of 0.70 and standard deviation of 19.26% for the trailing three-year period, making it a medium risk choice in the space. With about 398 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 $19.02 billion in assets, Vanguard Dividend Appreciation ETF has $59.51 billion. 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
BHP Group Limited Sponsored ADR (BHP) : Free Stock Analysis Report
Rio Tinto PLC (RIO) : Free Stock Analysis Report
Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports
iShares Core Dividend Growth ETF (DGRO): ETF Research Reports
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