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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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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
DGS is managed by Wisdomtree, and this fund has amassed over $2.45 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. DGS seeks to match the performance of the WisdomTree Emerging Markets SmallCap Dividend Index before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It has a 12-month trailing dividend yield of 4.01%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Transmissora Alianca De Energia Eletrica Sa (TAEE11) accounts for about 1.37% of the fund's total assets, followed by Synnex Technology International Corp and African Rainbow Minerals Ltd (ARI - Free Report) .
Its top 10 holdings account for approximately 8.66% of DGS's total assets under management.
Performance and Risk
So far this year, DGS has lost about -1.04%, and is up about 9.96% in the last one year (as of 03/01/2022). During this past 52-week period, the fund has traded between $49.12 and $56.09.
The fund has a beta of 0.87 and standard deviation of 20.93% for the trailing three-year period, which makes DGS a medium risk choice in this particular space. With about 1024 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.
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 $73.43 billion in assets, Vanguard FTSE Emerging Markets ETF has $79.28 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 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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
DGS is managed by Wisdomtree, and this fund has amassed over $2.45 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. DGS seeks to match the performance of the WisdomTree Emerging Markets SmallCap Dividend Index before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It has a 12-month trailing dividend yield of 4.01%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Transmissora Alianca De Energia Eletrica Sa (TAEE11) accounts for about 1.37% of the fund's total assets, followed by Synnex Technology International Corp and African Rainbow Minerals Ltd (ARI - Free Report) .
Its top 10 holdings account for approximately 8.66% of DGS's total assets under management.
Performance and Risk
So far this year, DGS has lost about -1.04%, and is up about 9.96% in the last one year (as of 03/01/2022). During this past 52-week period, the fund has traded between $49.12 and $56.09.
The fund has a beta of 0.87 and standard deviation of 20.93% for the trailing three-year period, which makes DGS a medium risk choice in this particular space. With about 1024 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.
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 $73.43 billion in assets, Vanguard FTSE Emerging Markets ETF has $79.28 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.