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 (NYS: 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


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


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 (NAS: PSEC) (1.1%)
Olin (NYS: OLN) (0.7%)
Fifth Street Finance (NYS: FSC) (0.7%)

Dividend Yield



Vanguard Small Cap Value (NYS: VBR)
iShares Russell 2000 Value (NYS: 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.

At the time thisarticle was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Try any of our Foolish newsletter servicesfree for 30 days.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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