WisdomTree Value Investing Family

Vigilance about valuations remains critical as growth stocks still carry elevated multiples. Prudent investors are seeking attractively valued companies with an additional key attribute—the ability to grow dividends to protect again inflation. That includes quality companies with healthy balance sheets and positive cash flows. To help investors capitalize around the world, WisdomTree developed value products in U.S. equities, international developed equities and emerging markets equities that provide this appealing focus on dividends.

We believe dividend weighting offers an edge over traditional market cap-weighted ETFs. Our lightbulb moment came in the early 2000s as the market saw the bursting of the tech bubble. We saw the nascent ETF industry building market cap-weighted funds that gave zero credence to valuations. Research has shown that weighting stocks according to their cash dividends could be accretive to performance—and this is critical in a time of heightened volatility.

Access High Growth in U.S. Equities

To ride the new wave of value, the WisdomTree U.S. High Dividend Fund (DHS) provides exposures to companies that generate high dividends—but in a risk-controlled manner emphasizing dividend sustainability. Market volatility has shown the importance of adding this risk screen overlay to your value strategies. The WisdomTree U.S. Quality Dividend Growth Fund (DGRW) incorporates quality and growth screens in its strategy. The goal is to help investors access companies and industries that are delivering the fastest dividend growth rates. Our flagship value ETF is the WisdomTree U.S. LargeCap Dividend Fund (DLN). Launched in 2006, it has outperformed the Russell 1000® Value Index over nearly all major time periods since its inception.

Access High Growth in International Developed Equities

Across numerous developed nations, value-seeking investors will see many single-digit price-to-earnings multiples. In Japan, we are noting greater valuation appeal and newfound competitiveness from cheaper currencies. Though threats like the war in Ukraine and its impact on energy costs are risks, there is potential for positive developments in geopolitics later in 2023 and the region’s continued transition to different sources of energy that support international developed equities. To access this value segment, the WisdomTree International High Dividend Fund (DTH) targets high-dividend-yielding companies in the developed world outside of the U.S. and Canada.

Access High Growth in Emerging Markets Equities

Emerging markets equities have been running into the wind in recent years, most particularly due to lockdowns in its largest economic market—China—and a very strong U.S. dollar. China’s pent-up demand has built for almost three years. We see an improvement in China’s consumption reverberating across emerging markets and the world. The WisdomTree Emerging Markets High Dividend Fund (DEM) captures the EM opportunity in a value-oriented way, but we also note that sometimes during periods of EM appreciation, investors are well served to focus on small caps with DGS. Many investors are surprised when they learn that a strategy of emerging markets focused on small caps and requiring dividend payments can be extremely broad in its focus.

Commentaries from Our Thought Leaders