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Is WisdomTree Emerging Markets High Dividend ETF (DEM) a Strong ETF Right Now?
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Launched on 07/13/2007, the WisdomTree Emerging Markets High Dividend ETF (DEM - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Emerging Market ETFs category of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, DEM has amassed assets over $1.94 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree Emerging Markets High Dividend Index.
The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of the highest dividend yielding stocks selected from the WisdomTree Emerging Markets Dividend Index.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.63%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.64%.
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.
Taking into account individual holdings, Vale Sa (VALE3) accounts for about 7.27% of the fund's total assets, followed by China Construction Bank Corp H and Petroleo Brasileiro Sa (PETR3).
Its top 10 holdings account for approximately 26.76% of DEM's total assets under management.
Performance and Risk
The ETF has added about 3.84% so far this year and is up roughly 9.45% in the last one year (as of 01/17/2022). In the past 52-week period, it has traded between $40.61 and $47.61.
DEM has a beta of 0.84 and standard deviation of 21.90% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 500 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Emerging Markets High 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.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $78.30 billion in assets, Vanguard FTSE Emerging Markets ETF has $80.91 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
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 High Dividend ETF (DEM) a Strong ETF Right Now?
Launched on 07/13/2007, the WisdomTree Emerging Markets High Dividend ETF (DEM - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Emerging Market ETFs category of the market.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, DEM has amassed assets over $1.94 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree Emerging Markets High Dividend Index.
The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of the highest dividend yielding stocks selected from the WisdomTree Emerging Markets Dividend Index.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.63%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.64%.
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.
Taking into account individual holdings, Vale Sa (VALE3) accounts for about 7.27% of the fund's total assets, followed by China Construction Bank Corp H and Petroleo Brasileiro Sa (PETR3).
Its top 10 holdings account for approximately 26.76% of DEM's total assets under management.
Performance and Risk
The ETF has added about 3.84% so far this year and is up roughly 9.45% in the last one year (as of 01/17/2022). In the past 52-week period, it has traded between $40.61 and $47.61.
DEM has a beta of 0.84 and standard deviation of 21.90% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 500 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Emerging Markets High 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.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $78.30 billion in assets, Vanguard FTSE Emerging Markets ETF has $80.91 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
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.