WisdomTree U.S. SmallCap Dividend Fund

WisdomTree U.S. SmallCap Dividend Fund (DES) is an index ETF holding about 522 small U.S. companies that pay regular cash dividends. It weights each company by the dividends it is projected to pay, not by its size. It pays monthly, with a trailing yield of 2.53% as of October 27, 2026. Its 0.38% expense ratio is above the 0.28% average for similar funds, and well above SPSM's 0.03%.

• Over the year to Oct 27, 2026, DES returned +19.0%, 5th of 9 among similar funds.
• Its 5-year annualized return was +7.6% and its 10-year +8.1%.
• In the 2020 COVID crash it fell 42.8% and regained its old high 9.5 months after the low.
• Its worst full calendar year was 2008 (-28.2%); its best was 2013 (+36.8%).
• The deepest fall in its price history was 65.4% (Jun 4, 2007 to Mar 9, 2009), recovered by Feb 3, 2012.

As of Jun 30, 2026, the fund held 522 securities; the ten largest made up 9.61% of assets.

• Over the three months to Jun 30, 2026, investors withdrew a net $9.6M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +7.82%, -0.33%, +5.91%.

DES tracks the WisdomTree U.S. SmallCap Dividend Index. WisdomTree, Inc. designed the index and also owns the fund's adviser, WisdomTree Asset Management. The index starts with the WisdomTree U.S. Total Dividend Index, a list of U.S.-listed companies that pay dividends. It removes the 300 largest companies, then keeps the ones that make up the bottom 25% of the remaining market value. Once a year, each company must pass three screens: it paid regular cash dividends over the past 12 months, it is worth at least $100 million, and its median daily trading over the past three months was at least $100,000. As of June 30, 2026, company sizes ranged from $79.1 million to $10.2 billion, with an average of $1.9 billion.

Each year the index sets weights by each company's share of the total cash dividends the group is expected to pay in the coming year, based on its latest declared dividend. So a big dividend payer can outweigh a larger company that pays less. No sector may exceed 25% at the annual reset, and real estate is capped at 10%. Weights can drift above these caps between resets. As of June 30, 2026, financials made up roughly 15% or more of the index.

The fund uses "representative sampling," meaning it may hold a sample of index stocks rather than every one, so its returns can differ from the index. It is legally classified as non-diversified, which allows it to put more money into fewer companies. Portfolio turnover was 40%.

• DES charges 0.38% a year, versus an average of 0.28% for the similar funds below (6th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $39 in the first year and $480 over 10 years (assuming a 5% annual return).

DES adds smaller U.S. dividend-paying companies that large-cap index funds barely hold, but its deep past losses make it a poor fit as the main stock holding.

DES could add exposure to hundreds of smaller dividend payers. It also pays monthly income, with a trailing yield of 2.53% as of October 27, 2026. Its cost is high for its category: under the SEC's standard example, $10,000 invested would cost $39 in the first year and $480 over 10 years. Its downturns have been deep. DES fell 64.1% in the 2008 financial crisis, and its worst calendar year was 2008, at -28.2%. It did not regain its June 2007 peak until February 2012. It dropped 42.8% in the 2020 COVID crash and recovered by January 2021. In 2022 it fell 21.7% and took until December 2023 to recover. A retiree forced to sell shares during stretches like these would lock in steep losses, and companies may cut dividends in hard times. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.