Should WisdomTree U.S. MidCap Dividend ETF (DON) Be on Your Investing Radar?

Launched on June 16, 2006, the WisdomTree U.S. MidCap Dividend ETF (DON) is a passively managed exchange traded fund designed to provide a broad exposure to the Mid Cap Value segment of the US equity market.

The fund is sponsored by Wisdomtree. It has amassed assets over $4.02 billion, making it one of the larger ETFs attempting to match the Mid Cap Value segment of the US equity market.

Why Mid Cap Value

With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. These types of companies, then, have a good balance of stability and growth potential.

Value stocks have lower than average price-to-earnings and price-to-book ratios. They also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.38%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.32%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector -- about 22.9% of the portfolio. Industrials and Consumer Discretionary round out the top three.

Looking at individual holdings, Franklin Resources Inc (BEN) accounts for about 1.39% of total assets, followed by Best Buy Co Inc (BBY) and Viatris Inc (VTRS).

The top 10 holdings account for about 11.34% of total assets under management.

Performance and Risk

DON seeks to match the performance of the WisdomTree U.S. MidCap Dividend Index before fees and expenses. The WisdomTree U.S. MidCap Dividend Index is a fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market.

The ETF return is roughly 12.73% so far this year and is up about 11.32% in the last one year (as of 09/01/2026). In the past 52-week period, it has traded between $49.64 and $58.90.

The ETF has a beta of 0.85 and standard deviation of 15.56% for the trailing three-year period, making it a medium risk choice in the space. With about 296 holdings, it effectively diversifies company-specific risk.

Alternatives

WisdomTree U.S. MidCap Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, DON is a good option for those seeking exposure to the Style Box - Mid Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell Mid-Cap Value ETF (IWS) and the Vanguard Morningstar Mid-Cap Value ETF (VOE) track a similar index. While iShares Russell Mid-Cap Value ETF has $15.67 billion in assets, Vanguard Morningstar Mid-Cap Value ETF has $24.13 billion. IWS has an expense ratio of 0.23% and VOE charges 0.05%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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