Is WisdomTree U.S. LargeCap ETF (EPS) a Strong ETF Right Now?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
EPS is managed by Wisdomtree, and this fund has amassed over $1.08 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the WisdomTree U.S. Earnings 500 Index before fees and expenses.
The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock Market.
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.08% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.46%.
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 25.50% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
Taking into account individual holdings, Google Inc (GOOGL) accounts for about 5.20% of the fund's total assets, followed by Amazon.com Inc (AMZN) and Microsoft Corp (MSFT).
EPS's top 10 holdings account for about 36.58% of its total assets under management.
The ETF has lost about -0.09% and it's up approximately 11.29% so far this year and in the past one year (as of 05/29/2025), respectively. EPS has traded between $52.66 and $64.16 during this last 52-week period.
The ETF has a beta of 0.96 and standard deviation of 16.79% for the trailing three-year period, making it a medium risk choice in the space. With about 503 holdings, it effectively diversifies company-specific risk.
WisdomTree U.S. LargeCap ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $67.73 billion in assets, Vanguard Value ETF has $132.68 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
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. LargeCap ETF (EPS): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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