WisdomTree Europe Launches Competitive Dividend ETF

WisdomTree Europe has launched an exchange traded fund (ETF) that offers investors exposure to dividend-focused companies and for cheaper fees that its main competitors.

The WisdomTree UK Equity Income UCITS ETF (WUKD) lists on the London Stock Exchange today and has annual fees of 0.29 percent. It physically replicates an index of 103 of the UK’s highest dividend yielding companies – with a 25 percent cap per sector and a 3 percent cap per stock.

Compared to two of the main competing funds, the iShares UK Dividend UCITS ETF (IUKD) and the SPDR S&P UK Dividend Aristocrats UCITS ETF (UKDV), WisdomTree’s offering has the lowest annual fees and the highest trailing 12-month dividend yield at 5.9 percent. It also rebalances annually which reduces turnover costs. However, the new fund does not yet compare on assets under management and therefore may be less liquid until it gains traction.

Top holdings in the fund include British American Tobacco, National Grid and Imperial Tobacco Group. The biggest sector is financials at 24.7 percent, followed by utilities at 13.3 percent.

Viktor Nossek, director of research at WisdomTree Europe, said: “The WisdomTree UK Equity Income UCITS ETF provides for greater diversification than is typical in other UK income strategies.”

The launch is the 11^th ETF in Europe from the provider, adding to its range of currency-hedged equities, small cap and dividend-focused funds.

In May the provider brought to Europe two of its flagship ETFs that have become giant funds in the U.S. - HEDJ and DXJ are designed to offer USD-hedged exposure to European and Japanese exporters respectively.