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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?
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $2 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, DEM 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
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.
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 7.84%.
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.
When you look at individual holdings, Vale Sa (VALE3) accounts for about 6.73% of the fund's total assets, followed by Mediatek Inc and China Construction Bank Corp H.
Performance and Risk
The ETF return is roughly 9.85% so far this year and is down about -5.10% in the last one year (as of 01/30/2023). In the past 52-week period, it has traded between $32.14 and $47.47.
The ETF has a beta of 0.74 and standard deviation of 23.27% for the trailing three-year period, making it a medium risk choice in the space. With about 458 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Emerging Markets High Dividend ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $73.13 billion in assets, Vanguard FTSE Emerging Markets ETF has $74.96 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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?
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $2 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, DEM 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
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.
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 7.84%.
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.
When you look at individual holdings, Vale Sa (VALE3) accounts for about 6.73% of the fund's total assets, followed by Mediatek Inc and China Construction Bank Corp H.
Performance and Risk
The ETF return is roughly 9.85% so far this year and is down about -5.10% in the last one year (as of 01/30/2023). In the past 52-week period, it has traded between $32.14 and $47.47.
The ETF has a beta of 0.74 and standard deviation of 23.27% for the trailing three-year period, making it a medium risk choice in the space. With about 458 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Emerging Markets High Dividend ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $73.13 billion in assets, Vanguard FTSE Emerging Markets ETF has $74.96 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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.