Midcap Dividend ETFs: Wisdom Tree MidCap Dividend Fund (DON)
My previous selection makes my third ETF a much easier choice. With a natural affinity for mid-cap stocks, I’m torn between the Wisdom Tree MidCap Dividend Fund (DON) and the WisdomTree International MidCap Dividend Fund (DIM).
However, since I’ve got a little international mid-cap exposure with the dividend ETFs above, I’ll go with DON, which invests in 364 U.S. dividend-paying stocks with market caps between $2 billion and $10 billion.
WisdomTree’s website states: “The Index is comprised of the companies that compose the top 75% of the market capitalization of the Wisdom Tree Dividend Index after the 300 largest companies have been removed.” So, out of 1300 companies, 364 make it into the ETF.
The No. 1 holding of DON is Best Buy (BBY), a stock I’ve liked for some time. With a 30-day yield of 2.48% and an annual expense ratio of 0.38%, you’re definitely getting quality at a reasonable price. Finally, not that this had any bearing on my selection, but Morningstar gives DON a four-star rating for above-average returns, combined with average risk.