Emerging markets stocks, particularly with this asset class on the mend in 2016, remain fertile ground for dividend investors. The WisdomTree Emerging Markets Dividend Fund
The WisdomTree Emerging Markets Dividend Fund follows the WisdomTree Emerging Markets Dividend Index (WTEMI), a fundamentally-weighted benchmark featuring dividend payers from Brazil, Chile, China, the Czech Republic, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey. DVEM's holdings are weighted on the basis of annual
As is the case with many of WisdomTree's domestic and developed markets dividend ETFs, which are some of the best-performing funds in their respective categories, DVEM's holdings are weighted by cash dividends paid. While DVEM itself is new, having debuted in April, its underlying index has been around nine and a half years. Over that period, DVEM's index has offered better than double the returns of the MSCI Emerging Markets Index,
WisdomTree's emerging markets dividend benchmarks “have beaten their
Allocations And Weight
DVEM currently allocates about a third of its weight to Taiwan and China, while Russia and South Korea combine for nearly 19 percent of the ETF's geographic lineup. The ETF is outperforming at a trying time for emerging markets dividends. Payouts from developing world companies fell 17 percent in the first quarter, though gains in India helped offset some of the reduced payouts from Brazilian commodities producers, according to
Brazil and India combine for about 10.4 percent of DVEM's weight. When DVEM's index was last rebalanced, 45 percent of its weight was tilted toward companies with dividend yields of 4.6 percent or higher. That is more than double the weight of the MSCI Emerging Markets Index to the comparable stocks.
“For those who believe in mean reversion of asset classes—and factor investors might want to increasingly consider mean reversion of factor investing strategies—EM dividends as a value investing strategy seem to make a lot of sense,” added WisdomTree.
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