Midcap Dividend Fund ETF (DON) Fees Outweigh Dividend Focus

The WisdomTree U.S. MidCap Dividend Fund ETF (DON) provides dividend-focused exposure to the mid-cap U.S. equity market. Launched on 06/16/2006, it is co-managed by WisdomTree Asset Management and Mellon Investments Corporation. The ETF charges a 0.38% expense ratio.

The WisdomTree U.S. MidCap Dividend Fund ETF (NYSEARCA:DON) is a dividend-focused investment vehicle that provides exposure to the mid-cap segment of the U.S. equity market. Launched on June 16, 2006, by WisdomTree Inc., the ETF is co-managed by WisdomTree Asset Management, Inc. and Mellon Investments Corporation. With an expense ratio of 0.38%, DON aims to deliver consistent dividend income to investors seeking mid-cap exposure.

Fund Overview and Objective

The WisdomTree U.S. MidCap Dividend Fund ETF (DON) is designed to track the performance of the WisdomTree U.S. MidCap Dividend Index. This index is composed of mid-cap U.S. stocks with above-average dividend yields and a history of stable and growing dividends. The fund's objective is to provide investors with a diversified portfolio of mid-cap stocks that offer attractive dividend yields.

Expense Ratio and Fees

One of the key factors to consider when evaluating an ETF is its expense ratio. The WisdomTree U.S. MidCap Dividend Fund ETF (DON) charges an expense ratio of 0.38%. This is relatively high compared to other dividend-focused ETFs, such as the Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard High Dividend Yield ETF (VYM), which both have expense ratios of 0.06% [3].

Performance and Yield

The performance of the WisdomTree U.S. MidCap Dividend Fund ETF (DON) has been relatively consistent over its history, with the fund providing a steady stream of dividend income to investors. The fund's yield, however, is not as high as some other dividend-focused ETFs. For example, the iShares Core High Dividend ETF (HDV) has a higher yield, but it also has a slightly higher expense ratio of 0.08% [3].

Comparison with Other Dividend ETFs

When comparing the WisdomTree U.S. MidCap Dividend Fund ETF (DON) with other dividend-focused ETFs, it is important to consider the fund's focus on mid-cap stocks and its relatively high expense ratio. While DON provides exposure to mid-cap stocks, it may not be the best choice for investors looking for a high-yield, low-cost dividend ETF. Investors should consider their specific investment goals and risk tolerance when selecting a dividend ETF.

Conclusion

The WisdomTree U.S. MidCap Dividend Fund ETF (DON) offers dividend-focused exposure to the mid-cap segment of the U.S. equity market. With an expense ratio of 0.38%, the fund provides a steady stream of dividend income but at a relatively high cost compared to other dividend-focused ETFs. Investors should carefully consider their investment goals and risk tolerance when evaluating DON as a potential addition to their portfolio.

References

[1] Seeking Alpha. (n.d.). Don the Dividend Focus Doesn't Justify the Higher Fees. Retrieved from https://seekingalpha.com/article/4804325-don-the-dividend-focus-doesnt-justify-the-higher-fees?source=affiliate_program:stockanalysis.com&utm_medium=affiliate&utm_source=stockanalysis.com&affid=858&oid=16&transaction=dd63626e8c9d46fab96bfc923f559e8f

[2] Seeking Alpha. (n.d.). Don the Dividend Focus Doesn't Justify the Higher Fees. Retrieved from https://seekingalpha.com/article/4804325-don-the-dividend-focus-doesnt-justify-the-higher-fees

[3] Barchart. (n.d.). Top 5 Dividend ETFs for 2025. Retrieved from https://www.barchart.com/story/news/33593023/top-5-dividend-etfs-for-2025