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Is WisdomTree Emerging Markets High Dividend ETF (DEM) a Strong ETF Right Now?
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Making its debut on 07/13/2007, smart beta exchange traded fund WisdomTree Emerging Markets High Dividend ETF (DEM - Free Report) provides investors broad exposure to the Broad Developed Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
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
DEM is managed by Wisdomtree, and this fund has amassed over $2.30 billion, which makes it one of the larger ETFs in the Broad Developed Market ETFs. This particular fund, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.63% for DEM, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 7.28%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Vale Sa (VALE3) accounts for about 5.64% of total assets, followed by Mediatek Inc and Petroleo Brasileiro Sa (PETR3).
DEM's top 10 holdings account for about 28.06% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Emerging Markets High Dividend ETF has added about 8.19% so far, and is down about -1.70% over the last 12 months (as of 06/05/2023). DEM has traded between $32.14 and $41.44 in this past 52-week period.
The ETF has a beta of 0.75 and standard deviation of 16.66% 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 Developed 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 $70.45 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.73 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 High Dividend ETF (DEM) a Strong ETF Right Now?
Making its debut on 07/13/2007, smart beta exchange traded fund WisdomTree Emerging Markets High Dividend ETF (DEM - Free Report) provides investors broad exposure to the Broad Developed Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
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
DEM is managed by Wisdomtree, and this fund has amassed over $2.30 billion, which makes it one of the larger ETFs in the Broad Developed Market ETFs. This particular fund, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.63% for DEM, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 7.28%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Vale Sa (VALE3) accounts for about 5.64% of total assets, followed by Mediatek Inc and Petroleo Brasileiro Sa (PETR3).
DEM's top 10 holdings account for about 28.06% of its total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Emerging Markets High Dividend ETF has added about 8.19% so far, and is down about -1.70% over the last 12 months (as of 06/05/2023). DEM has traded between $32.14 and $41.44 in this past 52-week period.
The ETF has a beta of 0.75 and standard deviation of 16.66% 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 Developed 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 $70.45 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.73 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.