Our Value Proposition for the 2020s

Why Value Strategies Now?

While growth had been outperforming since before the global financial crisis, the dominant multi-year run appears to have ended. Consider the Russell 3000 Growth and Value Indexes' price-to-earnings (P/E) ratios. Even after this year’s value comeback, the Russell 3000 Value Index’s P/E discount to Russell 3000 Growth remains near multi-year extremes. Fueled by soaring inflation and concern about Fed monetary tightening, value appears positioned to outperform as investors focus on fundamentals.

P/E Ratios of U.S. Value vs. Growth

Sources: WisdomTree, FactSet, as of 2/28/22

WisdomTree Value Investing Family

With rates rising, Fed policy tightening and inflation at levels not seen since the 1970s, it’s critical to be hypervigilant about valuations. Investors can seek attractively valued companies with an additional key attribute: the ability to withstand prolonged inflation. To help investors diversify their value allocation and potentially capitalize on today’s environment, WisdomTree offers value products with an appealing focus on dividends.

WisdomTree Dividend-Weighted Value ETFs

We believe our original idea—weighting by dividends—is particularly relevant now as investors engage with the stock market in a time of heightened volatility. Our “aha” moment happened in the early 2000s, when we observed a nascent ETF industry that focused on building market cap-weighted funds that gave zero credence to valuations.


Learn more about the origin of dividend weighting in this recent webinar

Our research showed that giving stocks weights according to their cash dividends could be accretive to performance. In 2006, we launched our first family of dividend-weighted ETFs, including our flagship value Fund, the WisdomTree U.S. LargeCap Dividend Fund (DLN). Now, as the post-COVID-19 world embraces value investing, we believe dividend weighting gives investors an edge over traditional market cap-weighted ETFs.

In addition to weighting by dividends, WisdomTree also provides a family of high dividend strategies that focuses on the highest dividend yielding subset of the market. The WisdomTree U.S. High Dividend Fund (DHS) provides exposures to companies that have high dividends but in a risk-controlled manner that emphasizes dividend sustainability. The recent volatility in the markets reinforces the importance of this risk screen overlay to value strategies.
Similar to our dividend-weighting concepts, we also have Funds that weight by earnings. If a company’s earnings become a greater proportion of the total earnings of all companies, it will receive a greater weight in the basket. The result is a value-oriented core Fund in large, mid- and small caps.

WisdomTree AI Enhanced Value Family

The WisdomTree U.S. AI Enhanced Value Fund (AIVL) and WisdomTree International AI Enhanced Value Fund (AIVI) bring an added layer of intelligence to value investing by blending human and artificial intelligence. Leveraging Voya’s Equity Machine Intelligence (EMI) proprietary model, they incorporate human/machine interaction at five critical stages, so investors can avoid narrow style biases, capture value exposure across equities and access uncorrelated return streams to help capitalize on long- and short-term opportunities.

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