WisdomTree U.S. Quality Dividend Growth Fund (DGRW US) – Portfolio Construction Methodology

The underlying WisdomTree U.S. Quality Dividend Growth Index delivers a rules-based portfolio of U.S. dividend payers. From the WisdomTree U.S. Dividend Index, companies with earnings yield > dividend yield and minimum market cap of USD 2bn that satisfy a liquidity “calculated volume factor” screen (USD 200m/400m) are eligible; REITs are included for screening but sector caps apply. Candidates are ranked 50% by medium-term consensus earnings-growth estimate, 25% by 3-year average ROE and 25% by 3-year average ROA; firms with negative equity receive a median quality score if they have 5-year dividend growth. The top 300 names are selected, excluding current members of the WisdomTree U.S. SmallCap Dividend Index. Weights are proportional to indicated cash dividends, with single-stock cap 8% and sector caps of 30% Information Technology, 10% Real Estate, and 20% all others. The index reconstitutes and rebalances annually in November.

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