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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 Developed 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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $2.68 billion, this makes it one of the larger ETFs in the Broad Developed Market ETFs. DGS is managed by Wisdomtree. DGS, 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 5.10%.
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, Growthpoint Properties Ltd (GRT) accounts for about 1.22% of the fund's total assets, followed by Banco Del Bajio Sa (BBAJIOO) and Thungela Resources Ltd (TGA).
Its top 10 holdings account for approximately 8.74% of DGS's total assets under management.
Performance and Risk
The ETF has added about 3.88% so far this year and is down about -0.74% in the last one year (as of 05/17/2023). In the past 52-week period, it has traded between $39.34 and $50.75.
The ETF has a beta of 0.81 and standard deviation of 15.63% for the trailing three-year period, making it a medium risk choice in the space. With about 974 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 Developed 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 $69.25 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.15 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 Developed 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 Developed 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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $2.68 billion, this makes it one of the larger ETFs in the Broad Developed Market ETFs. DGS is managed by Wisdomtree. DGS, 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 5.10%.
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, Growthpoint Properties Ltd (GRT) accounts for about 1.22% of the fund's total assets, followed by Banco Del Bajio Sa (BBAJIOO) and Thungela Resources Ltd (TGA).
Its top 10 holdings account for approximately 8.74% of DGS's total assets under management.
Performance and Risk
The ETF has added about 3.88% so far this year and is down about -0.74% in the last one year (as of 05/17/2023). In the past 52-week period, it has traded between $39.34 and $50.75.
The ETF has a beta of 0.81 and standard deviation of 15.63% for the trailing three-year period, making it a medium risk choice in the space. With about 974 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 Developed 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 $69.25 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.15 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 Developed 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.