The WisdomTree U.S. SmallCap Fund (EES) was launched on 02/23/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Wisdomtree. It has amassed assets over $823.43 M, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.32%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 24.60% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Warrior Met Coal Inc (HCC) accounts for about 0.97% of total assets, followed by Amc Networks Inc (AMCX) and Cleveland-Cliffs Inc (CLF).
The top 10 holdings account for about 7.91% of total assets under management.
Performance and Risk
EES seeks to match the performance of the WisdomTree U.S. SmallCap Earnings Index before fees and expenses. The WisdomTree U.S. SmallCap Earnings Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the small-capitalization segment of the U.S. Stock Market.
The ETF has lost about -0.62% so far this year and is up roughly 20.45% in the last one year (as of 01/06/2020). In the past 52-week period, it has traded between $32.50 and $38.59.
The ETF has a beta of 1.19 and standard deviation of 15.92% for the trailing three-year period, making it a medium risk choice in the space. With about 856 holdings, it effectively diversifies company-specific risk.
WisdomTree U.S. SmallCap Fund carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, EES is a good option for those seeking exposure to the Style Box - Small Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $9.87 B in assets, Vanguard Small-Cap Value ETF has $14.58 B. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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WisdomTree U.S. SmallCap Fund (EES): ETF Research Reports
AMC Networks Inc. (AMCX) : Free Stock Analysis Report
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
iShares Russell 2000 Value ETF (IWN): ETF Research Reports
Warrior Met Coal Inc. (HCC) : Free Stock Analysis Report
Cleveland-Cliffs Inc. (CLF) : Free Stock Analysis Report
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