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WisdomTree Europe Quality Dividend Growth ETF: Positive Sector Selection Leads To Outperformance

Published Thu, 02 Jul 2020 11:32:28 -0400 on Seeking Alpha

Seeking AlphaETF AnalysisWisdomTree Europe Quality Dividend Growth ETF: Positive Sector Selection Leads To OutperformanceJul. 2, 2020 11:32 AM ET|| About: WisdomTree Trust - WisdomTree Europe Quality Dividend Growth Fund (EUDG)by: Michael A. Gayed, CFAMichael A. Gayed, CFA The Lead-Lag ReportAnticipate Corrections and Volatility with Award Winning ResearchSummaryThe fund managed to outperform similar funds year-to-date because of its sector selection during the March downturn.
The US dollar has been weakening, which helps international funds.
Europe seems to be doing a better job controlling new outbreaks of Covid-19.
An investor needs to do very few things right as long as he avoids big mistakes. - Warren Buffett
It’s looking like the Eurozone is outpacing the U.S. in terms of both coronavirus mitigation and economic recovery. PMI readings in Europe managed to beat expectations, while several EU nations are showing varying degrees of success limiting the COVID spread. "The sentiment favoring foreign equities has continued to improve,” as described in the Lead-Lag Report this week. The WisdomTree Europe Quality Dividend Growth ETF (NYSEARCA: EUDG) is a great way to profit from this stronger recovery in Europe relative to the US. The fund has outpaced the S&P 500 Index by 271 bps over the past month and sports a dividend yield of 2.47%, which is significantly higher than the S&P 500 Index or the 30-year US Treasury bonds.


EUDG invests in companies listed on the European exchange and screens for return on equity, return on assets and earnings growth. In order to make the cut for the fund, the company must have a dividend ratio greater than 1x. WisdomTree tries to differentiate its fund from other dividend growth funds by using this more forward-looking approach than just using the dividend history of a company.
These criteria helped the fund by reducing the weighting to financials and energy-related companies compared to other... Read more