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Is WisdomTree Emerging Markets High Dividend ETF (DEM) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Emerging Markets High Dividend ETF (DEM - Free Report) debuted on 07/13/2007, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Wisdomtree, DEM has amassed assets over $2.84 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. DEM seeks to match the performance of the WisdomTree Emerging Markets High Dividend Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.63% for this ETF, which makes it on par with most peer products in the space.
DEM's 12-month trailing dividend yield is 5.56%.
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, Mediatek Inc accounts for about 5.97% of total assets, followed by Petroleo Brasileiro Sa (PETR3) and Hon Hai Precision Industry Co.
The top 10 holdings account for about 30.66% of total assets under management.
Performance and Risk
So far this year, DEM has added about 4.83%, and it's up approximately 17.07% in the last one year (as of 04/30/2024). During this past 52-week period, the fund has traded between $36.36 and $42.88.
The fund has a beta of 0.76 and standard deviation of 15.63% for the trailing three-year period, which makes DEM a medium risk choice in this particular space. With about 490 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 $77.33 billion in assets, Vanguard FTSE Emerging Markets ETF has $77.52 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?
A smart beta exchange traded fund, the WisdomTree Emerging Markets High Dividend ETF (DEM - Free Report) debuted on 07/13/2007, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Wisdomtree, DEM has amassed assets over $2.84 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. DEM seeks to match the performance of the WisdomTree Emerging Markets High Dividend Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.63% for this ETF, which makes it on par with most peer products in the space.
DEM's 12-month trailing dividend yield is 5.56%.
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, Mediatek Inc accounts for about 5.97% of total assets, followed by Petroleo Brasileiro Sa (PETR3) and Hon Hai Precision Industry Co.
The top 10 holdings account for about 30.66% of total assets under management.
Performance and Risk
So far this year, DEM has added about 4.83%, and it's up approximately 17.07% in the last one year (as of 04/30/2024). During this past 52-week period, the fund has traded between $36.36 and $42.88.
The fund has a beta of 0.76 and standard deviation of 15.63% for the trailing three-year period, which makes DEM a medium risk choice in this particular space. With about 490 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 $77.33 billion in assets, Vanguard FTSE Emerging Markets ETF has $77.52 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.