5-Star ETFs Poised to Pop: WisdomTree SmallCap Dividend

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the WisdomTree SmallCap Dividend Fund (NYSE: DES  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at WisdomTree SmallCap Dividend and see what CAPS investors are saying about the ETF right now.

WisdomTree SmallCap Dividend facts

Inception June 2006
Total Assets $231.8 million
Investment Approach Seeks to replicate the WisdomTree SmallCap Dividend index, which measures the performance of the small-capitalization segment of the U.S. dividend-paying market.
Expense Ratio 0.38%
1-Year / 3-Year / 5-Year Annualized Return 0.3% / 15.1% / (0.6%)
Top Holdings with High CAPS Rating (4 or 5 Stars) and Portfolio Weight Prospect Capital (Nasdaq: PSEC  ) (1.1%)
Olin (NYSE: OLN  ) (0.7%)
Fifth Street Finance (NYSE: FSC  ) (0.7%)
Dividend Yield 3.8%
Alternatives Vanguard Small Cap Value (NYSE: VBR  )
iShares Russell 2000 Value (NYSE: IWN  )

Sources: Morningstar and Motley Fool CAPS.

On CAPS, all but one of the 53 members who have rated WisdomTree SmallCap Dividend believe the ETF will outperform the S&P 500 going forward. These bulls include acegdl007 and djudah.

Earlier this year, acegdl007 tapped the ETF as a particularly potent income opportunity: "Strong outperforming small caps coupled with good dividends ... sounds like a recipe for success."

WisdomTree SmallCap Dividend even sports an average turnover ratio of just 11%. That's lower than that of other small-cap value ETFs like Vanguard Small Cap Value (25%) and iShares Russell 2000 Value (32%).

CAPS member djudah expands on the outperform argument:

Small caps outperform over the long run compared with large and mega cap stocks. Couple this with dividends from these stocks and you add to your return over the long run. It may be several months to years before the economy turns around, but positioning yourself now for that turnaround is a good plan.

What do you think about WisdomTree SmallCap Dividend, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track WisdomTree SmallCap Dividend? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (1) | Recommend This Article (1)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 08, 2011, at 4:34 PM, benn44 wrote:

    I purchased several hundreds shares of PSEC a year ago and then sold it on a 31 day buy back in order to take advantage of a Capital Gaines loss. On the 2nd of this mouth my 31 days were up and I repurchased. I don't know of any other stocks that are paying the div's on a monthly basis like PSEC with the solid performance.

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