Categories: DividendsExchange Traded Funds (ETFs)

How WisdomTree Grows Portfolios with Dividends

We continue our examination of various exchange-traded fund (ETF) providers today by taking a look at WisdomTree. WisdomTree entered the ETF market in 2006 and is currently the fifth-largest provider of ETFs, with 62 funds.

WisdomTree’s unique value to investors is that it offers an alternative method for weighting its funds. Many ETFs follow a market-capitalization strategy, i.e. the proportion that a fund holds of its various equities reflects the ratio of those equities to each other in the stock market.

Instead of weighting its investments that way, WisdomTree looks at fundamentals in constructing its funds. WisdomTree offers two proprietary weighting systems: the Earning Stream method and the Dividend stream method. The company’s analysts have taken note, as have we, that higher and more consistent dividends are an objective indication of companies that give higher returns.

One such fund is the WisdomTree Europe SmallCap Dividend Fund (DFE). This fund has managed to retain value in the first two tumultuous months of 2014, with a year-to-date return of 0.22%. Last year’s performance featured a market-beating 40.85% return. For investors interested in additional income, the current yield is 2.39%.

In addition to equity ETFs, WisdomTree features alternative investments and currency ETFs, offering global diversity for your portfolio.

If you’re interested in investing with a focus on fundamentals, as opposed to the tumultuous fashions of stock prices, WisdomTree offers you that chance in the transparent and economical form of ETFs.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed them, I encourage you to read my articles from previous weeks about ETF providers First Trust, ProShares, Vanguard, iShares and State Street. I also invite you to share your thoughts below.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/