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Is WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the WisdomTree Emerging Markets SmallCap Dividend ETF (DGS - Free Report) is a smart beta exchange traded fund launched on 10/30/2007.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, DGS has amassed assets over $2.77 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree Emerging Markets SmallCap Dividend Index.
The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of primarily small cap stocks selected from the WisdomTree Emerging Markets Dividend Index. Companies included in the Index fall within the bottom 10% of total market capitalization of the WisdomTree Emerging Markets Dividend Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It's 12-month trailing dividend yield comes in at 4.30%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Chicony Electronics Co Ltd accounts for about 1.04% of total assets, followed by Banco Del Bajio Sa (BBAJIOO) and Old Mutual Ltd (OMU).
DGS's top 10 holdings account for about 7.98% of its total assets under management.
Performance and Risk
The ETF has added roughly 2.84% and it's up approximately 16.27% so far this year and in the past one year (as of 04/04/2024), respectively. DGS has traded between $43.82 and $51.31 during this last 52-week period.
The fund has a beta of 0.82 and standard deviation of 14.43% for the trailing three-year period, which makes DGS a medium risk choice in this particular space. With about 973 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Emerging Markets SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $76.38 billion in assets, iShares Core MSCI Emerging Markets ETF has $76.73 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
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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Is WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the WisdomTree Emerging Markets SmallCap Dividend ETF (DGS - Free Report) is a smart beta exchange traded fund launched on 10/30/2007.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, DGS has amassed assets over $2.77 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree Emerging Markets SmallCap Dividend Index.
The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of primarily small cap stocks selected from the WisdomTree Emerging Markets Dividend Index. Companies included in the Index fall within the bottom 10% of total market capitalization of the WisdomTree Emerging Markets Dividend Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It's 12-month trailing dividend yield comes in at 4.30%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Chicony Electronics Co Ltd accounts for about 1.04% of total assets, followed by Banco Del Bajio Sa (BBAJIOO) and Old Mutual Ltd (OMU).
DGS's top 10 holdings account for about 7.98% of its total assets under management.
Performance and Risk
The ETF has added roughly 2.84% and it's up approximately 16.27% so far this year and in the past one year (as of 04/04/2024), respectively. DGS has traded between $43.82 and $51.31 during this last 52-week period.
The fund has a beta of 0.82 and standard deviation of 14.43% for the trailing three-year period, which makes DGS a medium risk choice in this particular space. With about 973 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Emerging Markets SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $76.38 billion in assets, iShares Core MSCI Emerging Markets ETF has $76.73 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
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.