DIVO - DTD: Heavier Weight On Mega-Cap IT Presents Multiple Risks

2024-07-06 03:25:49 ET

Summary

• DTD warrants a hold rating due to multiple risk factors, including high valuation, heavy IT sector weighting, and lower dividend yield compared to peers.
• DTD is passively managed, tracks the WisdomTree U.S. Dividend Index, has 827 holdings, $1.23B AUM, and focuses heavily on mega-cap IT companies.
• DTD's 5-year performance is strong at 11.85%, but lags behind SCHD and VYM in terms of dividend yield and expense ratio, with potential for correction in the IT sector.

Investment Thesis

WisdomTree U.S. Total Dividend Fund ( DTD ) warrants a hold rating due to multiple risk factors for the fund. While DTD has seen strong performance compared to peers, comparable ETFs have seen roughly the same capital appreciation with a higher dividend yields and lower expense ratios. Additionally, DTD is heavy on mega-cap information technology companies which has resulted in a relatively high valuation for the fund with increased risk of correction and volatility....

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