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Is WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Emerging Markets SmallCap Dividend ETF (DGS - Free Report) debuted on 10/30/2007, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Wisdomtree. DGS has been able to amass assets over $1.96 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. This particular fund 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
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.
Operating expenses on an annual basis are 0.58% for DGS, making it on par with most peer products in the space.
DGS's 12-month trailing dividend yield is 3.48%.
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, Old Mutual Ltd (OMU) accounts for about 0.98% of total assets, followed by Beijing Oriental Yuhong Water Tech An and Growthpoint Properties Ltd (GRT).
Its top 10 holdings account for approximately 7.1% of DGS's total assets under management.
Performance and Risk
The ETF has added about 5.70% and is up about 11.36% so far this year and in the past one year (as of 12/10/2024), respectively. DGS has traded between $47.45 and $54.37 during this last 52-week period.
DGS has a beta of 0.79 and standard deviation of 14.54% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1113 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 $83.11 billion in assets, Vanguard FTSE Emerging Markets ETF has $84.63 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 SmallCap Dividend ETF (DGS) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree Emerging Markets SmallCap Dividend ETF (DGS - Free Report) debuted on 10/30/2007, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Wisdomtree. DGS has been able to amass assets over $1.96 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. This particular fund 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
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.
Operating expenses on an annual basis are 0.58% for DGS, making it on par with most peer products in the space.
DGS's 12-month trailing dividend yield is 3.48%.
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, Old Mutual Ltd (OMU) accounts for about 0.98% of total assets, followed by Beijing Oriental Yuhong Water Tech An and Growthpoint Properties Ltd (GRT).
Its top 10 holdings account for approximately 7.1% of DGS's total assets under management.
Performance and Risk
The ETF has added about 5.70% and is up about 11.36% so far this year and in the past one year (as of 12/10/2024), respectively. DGS has traded between $47.45 and $54.37 during this last 52-week period.
DGS has a beta of 0.79 and standard deviation of 14.54% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1113 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 $83.11 billion in assets, Vanguard FTSE Emerging Markets ETF has $84.63 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.