Yahoo Finance Is WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) a Strong ETF Right Now?
Making its debut on 10/30/2007, smart beta exchange traded fund WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) provides investors 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
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
Managed by Wisdomtree, DGS has amassed assets over $2.46 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, DGS 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
The fund has a 12-month trailing dividend yield of 4.26%.
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, Chicony Electronics Co Ltd accounts for about 1.21% of the fund's total assets, followed by Oil India Ltd (OINL) and Banco Del Bajio Sa (BBAJIOO).
Its top 10 holdings account for approximately 8.58% of DGS's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Emerging Markets SmallCap Dividend ETF return is roughly 3.81% so far, and is up about 15.38% over the last 12 months (as of 06/04/2024). DGS has traded between $43.82 and $53.11 in this past 52-week period.
DGS has a beta of 0.81 and standard deviation of 14.24% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 988 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.
Vanguard FTSE Emerging Markets ETF (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $78.36 billion in assets, iShares Core MSCI Emerging Markets ETF has $78.53 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
WisdomTree Emerging Markets SmallCap Dividend ETF (DGS): ETF Research Reports
iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports
Vanguard FTSE Emerging Markets ETF (VWO): ETF Research Reports
