WisdomTree Emerging Markets High Dividend Fund (DEM)

ETF WisdomTree Emerging Markets High Dividend Fund (DEM) Overview

Profile

WisdomTree Emerging Markets High Dividend Fund (DEM) is an actively managed ETF that seeks to provide high dividend income and capital appreciation by investing in high-yielding stocks in emerging markets. The fund invests across various sectors and countries, with a focus on companies with strong financial fundamentals and dividend-paying histories. The ETF employs a proprietary screening process to select stocks with high dividend yields, reasonable valuations, and strong growth potential.

Objective

The primary investment goal of DEM is to generate high dividend income for investors. The fund also aims to achieve capital appreciation through investment in emerging market equities.

Issuer

WisdomTree Investments, Inc.

• Reputation and Reliability:
  • WisdomTree is a well-established and reputable asset management firm with over $82.7 billion in assets under management.
  • The firm is known for its innovative and quantitative investment approaches.
• Management:
  • Experienced investment team with expertise in emerging markets and dividend investing.
  • Led by Jeremy Schwartz, CEO and Co-Founder of WisdomTree, with over 20 years of experience in the financial industry.

Market Share

DEM has a market share of approximately 1.9% in the emerging markets high dividend ETF category.

Total Net Assets

As of November 1, 2023, DEM has total net assets of approximately $1.2 billion.

Moat

• Active Management: DEM employs an active management approach that allows flexibility in selecting stocks with the highest potential for dividend income and capital appreciation.
• Focus on Emerging Markets: The fund's focus on emerging markets offers investors access to high-growth potential companies with potentially higher dividend yields.
• Quantitative Screening Process: DEM utilizes a proprietary screening process to identify undervalued stocks with strong fundamentals and growth prospects.

Financial Performance

• Historical Returns:
  • 1 Year: -11.7%
  • 3 Year (Annualized): -1.2%
  • 5 Year (Annualized): 5.1%
• Benchmark Comparison:
  • DEM has underperformed its benchmark, the MSCI Emerging Markets Index, over the past 3 and 5 years.

Growth Trajectory

Emerging markets are expected to continue experiencing strong economic growth in the coming years. This could lead to increased investment opportunities and higher dividend payouts for companies in these markets, potentially benefiting DEM investors.

Liquidity

• Average Trading Volume: Approximately 250,000 shares per day.
• Bid-Ask Spread: Tight bid-ask spread, indicating good liquidity.

Market Dynamics

• Economic Growth: Strong economic growth in emerging markets provides opportunities for corporate earnings and dividend growth.
• Interest Rates: Rising interest rates could put pressure on emerging market economies and potentially impact dividend payouts.
• Geopolitical Risks: Political and economic instability in certain emerging markets can impact returns.

Competitors

• iShares Emerging Markets High Dividend ETF (DVYE) with a market share of 28.7%
• Vanguard Emerging Markets High Dividend Yield ETF (VYMI) with a market share of 25.3%
• SPDR S&P Emerging Markets Dividend ETF (EDIV) with a market share of 14.2%

Expense Ratio

The expense ratio for DEM is 0.58%.

Investment Approach and Strategy

• Strategy:
  • Actively managed
  • Focus on high-yielding stocks in emerging markets
• Composition:
  • Primarily invests in stocks across various sectors and countries in emerging markets

Key Points

• Provides access to high-yielding stocks in emerging markets.
• Actively managed with a focus on identifying undervalued stocks with strong fundamentals.
• Offers the potential for high dividend income and capital appreciation.

Risks

• Volatility: Emerging markets equities can be more volatile than developed market equities.
• Market Risk: The value of the fund's investments can be affected by factors such as economic conditions, interest rates, and political instability.
• Currency Risk: The fund is exposed to currency risk due to its investments in emerging market currencies.
• Dividend Risk: Dividends are not guaranteed and can be reduced or eliminated at any time.

Who Should Consider Investing

DEM is suitable for investors who are:

• Seeking high dividend income.
• Comfortable with volatility and higher risk associated with emerging markets.
• Have a long-term investment horizon.

Fundamental Rating Based on AI

7/10

DEM exhibits a solid foundation with a well-established issuer, a unique investment strategy focusing on undervalued high-dividend stocks, and good liquidity. However, its recent underperformance compared to the benchmark and exposure to emerging market risks warrant cautious consideration.

Resources and Disclaimers

• WisdomTree Website: https://www.wisdomtree.com/us/etfs/equity/dem
• Morningstar: https://www.morningstar.com/etfs/arcx/dem/quote
• Reuters: https://www.reuters.com/finance/stocks/dem.o

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.