Is WisdomTree U.S. MidCap Dividend ETF (DON) a Strong ETF Right Now?

The WisdomTree U.S. MidCap Dividend ETF (DON) was launched on 06/16/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Value category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Managed by Wisdomtree, DON has amassed assets over $3.69 billion, making it one of the larger ETFs in the Style Box - Mid Cap Value. This particular fund seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index before fees and expenses.

The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

Annual operating expenses for DON are 0.38%, which makes it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 2.45%.

Sector Exposure and Top Holdings

ETFs offer 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.

Representing 21.4% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Consumer Discretionary round out the top three.

Looking at individual holdings, Viatris Inc (VTRS) accounts for about 1.2% of total assets, followed by Franklin Resources Inc (BEN) and Best Buy Co Inc (BBY).

The top 10 holdings account for about 10.69% of total assets under management.

Performance and Risk

So far this year, DON has added about 0.7%, and is up roughly 8.05% in the last one year (as of 03/24/2026). During this past 52-week period, the fund has traded between $43.28 and $56.39.

The fund has a beta of 0.90 and standard deviation of 16.11% for the trailing three-year period, which makes DON a medium risk choice in this particular space. With about 298 holdings, it effectively diversifies company-specific risk .

Alternatives

WisdomTree U.S. MidCap Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

iShares Russell Mid-Cap Value ETF (IWS) tracks Russell MidCap Value Index and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) tracks CRSP U.S. Mid Cap Value Index. iShares Russell Mid-Cap Value ETF has $14.63 billion in assets, Vanguard Mid-Cap Value Index Fund ETF Shares has $21.06 billion. IWS has an expense ratio of 0.23% and VOE changes 0.05%.

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 - Mid Cap Value

Bottom Line

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. MidCap Dividend ETF (DON): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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