Is WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the WisdomTreeWT-- U.S. SmallCap Quality Dividend Growth ETF (DGRS) is a smart beta exchange traded fund launched on 07/25/2013.
What Are Smart Beta ETFs?
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $396.72 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. SmallCap Quality Dividend Growth Index.
The WisdomTree U.S. SmallCap Quality Dividend Growth Index is a fundamentally weighted index that consists of the small-capitalization segment of dividend-paying stocks with growth characteristics.
Cost & Other Expenses
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.
Annual operating expenses for this ETF are 0.38%, making it on par with most peer products in the space.
DGRS's 12-month trailing dividend yield is 2.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
DGRS's heaviest allocation is in the Financials sector, which is about 27% of the portfolio. Its Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Victory Capital Holding - A (VCTR) accounts for about 2.64% of the fund's total assets, followed by Avnet Inc (AVT) and Archrock Inc (AROC).
DGRS's top 10 holdings account for about 18.61% of its total assets under management.
Performance and Risk
The ETF return is roughly 18.37% and it's up approximately 17.69% so far this year and in the past one year (as of 09/11/2026), respectively. DGRSDGRS-- has traded between $46.24 and $61.63 during this last 52-week period.
DGRS has a beta of 0.98 and standard deviation of 19.17% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 200 holdings, it effectively diversifies company-specific risk .
Alternatives
WisdomTree U.S. SmallCap Quality Dividend Growth ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) tracks NASDAQ US Dividend Achievers Select Index. iShares Core Dividend Growth ETF has $42.89 billion in assets, Vanguard Dividend Appreciation Index Fund ETF Shares has $110.75 billion. DGRO has an expense ratio of 0.08% and VIG changes 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 - Small Cap Blend
Bottom Line
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WisdomTree U.S. SmallCap Quality Dividend Growth ETF (DGRS): ETF Research Reports
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