Exchange traded funds (ETFs) and indexing trivia time and this will be a fun, pertinent exercise given the impressive start to 2026 being notched by value stocks and the related ETFs.
Did you know that although its weight is about half of what’s found in the S&P 500, technology is the largest sector allocation in the S&P 500 Value Index? Did you know that one of the largest ETFs tracking that value index features three members of the magnificent seven among its top six holdings?
Did you know that Walmart (NASDAQ: WMT) and Costco (NASDAQ: COST) sport higher price-to-earnings ratios than Nvidia (NASDAQ: NVDA) and those two consumer staples giants are top five holdings in the S&P 500 Value Index?
If you knew all of that, congratulations. You’re an ETF/index nerd just like I am. More important is the point that some of value funds advisors and investors most revere may not be serving up the amount of value end users expect. Others are up to the task, including the WisdomTree U.S. High Dividend Fund (DHS).
DHS Details
The $1.46 billion DHS, which turns 20 years old in June, is off to an impressive start this year and that includes both pure and risk-adjusted performance as the ETF Replay charts below indicate. The other tickers are basic, popular value ETFs.
Admittedly, two months isn’t a long period in value investing, but DHS’s year-to-date showing shouldn’t be glossed over. Not when the dividend ETF is offering legitimate value.
“With DHS trading at 13.8x earnings and 8.9x cash flow compared to materially higher multiples for the broader market, investors are paying far less for each dollar of income and assets, creating a valuation cushion that could matter if growth expectations reset,” notes WisdomTree’s Christopher Gannatti. “DHS trades at a meaningful discount. This is not a subtle spread—investors are paying materially less for each dollar of earnings, cash flow and assets. If market leadership broadens beyond mega-cap growth, that valuation cushion could matter significantly—as it has so far in 2026.”
When it comes to value purity, that’s born out in DHS’s sector exposures. Tech? Try again. That group doesn’t even account for 3% of this ETF’s weight. Conversely, financial services, consumer staples and healthcare combine for approximately 52% of the portfolio. Don’t be alarmed by the fund’s prominent consumer staples exposure because richly valued Costco and Walmart aren’t part of the lineup.
An ETF Right for These Value Times
In bygone eras of investing, it was enough to select stocks that looked inexpensive by traditional metrics and call it a value day, but times change and advisors and investors need to be more responsive.
Consider the following. The overlap by weight between the S&P 500 and the Vanguard Value ETF (VTV) is 44%. That’s not a knock on that ETF, but it drives home the point that a lot of beloved passive value strategies are hugging broader benchmarks more closely than investors realize. DHS ameliorates that scenario and does so with the benefit of a monthly dividend.
“Some value strategies now look structurally closer to the S&P 500 Index benchmark than many investors appreciate,” concludes Gannatti. “Others remain distinctly positioned in classic, higher-yielding sectors and trade at materially lower multiples. When leadership narrows, convergence helps. When leadership broadens or rotates, differentiation matters.”
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