Designed to provide broad exposure to the Style Box - Small Cap Value category of the market, the WisdomTree U.S. SmallCap Dividend ETF (DES) is a smart beta exchange traded fund launched on 06/16/2006.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree. DES has been able to amass assets over $2.13 billion, making it one of the average sized ETFs in the Style Box - Small Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Dividend Index.
The WisdomTree U.S. SmallCap Dividend Index is a fundamentally weighted index measuring the performance of the small-capitalization segment of the US dividend-paying market.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.32%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Financials sector - about 24.9% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Taking into account individual holdings, Tfs Financial Corp (TFSL) accounts for about 1.06% of the fund's total assets, followed by Sonoco Products Co (SON) and Kodiak Gas Services Inc (KGS).
The top 10 holdings account for about 9.38% of total assets under management.
Performance and Risk
The ETF has gained about 19.43% so far this year and is up about 23.2% in the last one year (as of 07/09/2026). In the past 52-week period, it has traded between $31.31 and $40.80
The fund has a beta of 0.89 and standard deviation of 18.55% for the trailing three-year period, which makes DES a medium risk choice in this particular space. With about 532 holdings, it effectively diversifies company-specific risk .
Alternatives
WisdomTree U.S. SmallCap Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
iShares Russell 2000 Value ETF (IWN) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) tracks CRSP U.S. Small Cap Value Index. iShares Russell 2000 Value ETF has $14.09 billion in assets, Vanguard Small-Cap Value Index Fund ETF Shares has $36.25 billion. IWN has an expense ratio of 0.24% and VBR changes 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value
Bottom Line
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WisdomTree U.S. SmallCap Dividend ETF (DES): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).