WisdomTree Emerging Markets High Dividend Fund (DEM)

ETF WisdomTree Emerging Markets High Dividend Fund (DEM)

Profile:

The WisdomTree Emerging Markets High Dividend Fund (DEM) is an exchange-traded fund (ETF) that invests in high-dividend-paying stocks from emerging markets. It is a passively managed fund that tracks the WisdomTree Emerging Markets High Dividend Index. The fund invests in a diversified portfolio of approximately 400 stocks across various sectors, including financials, energy, materials, and consumer staples. DEM aims to provide investors with high current income, capital appreciation, and diversification in a single investment.

Objective:

The primary investment objective of DEM is to provide a high level of current income. The fund achieves this objective by investing in high-dividend-paying stocks from emerging markets. DEM also seeks to provide capital appreciation and diversification benefits.

Issuer:

WisdomTree Investments, Inc. is the issuer of DEM. WisdomTree is a global asset manager with expertise in developing innovative and efficient index-based investment solutions. The company has over $90 billion in assets under management and is known for its reputation for reliability and transparency.

Management:

WisdomTree's experienced team of portfolio managers and analysts oversees the DEM fund. The team has a deep understanding of emerging markets and a proven track record of success in managing index-based ETFs.

Market Share:

DEM has approximately 0.8% market share in the emerging markets high dividend ETF sector.

Total Net Assets:

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

Moat:

DEM's competitive advantages include:

• Focus on high-dividend-paying stocks: The fund's focus on high-dividend-paying stocks sets it apart from other emerging market ETFs with lower dividend yields.
• Diversified portfolio: DEM's diversified portfolio across various sectors helps to mitigate risk and provide investors with exposure to a broad range of emerging market opportunities.
• Passive management: Passive management keeps the fund's expense ratio low compared to actively managed emerging market ETFs.

Financial Performance:

DEM has a strong track record of performance with an average annual return of 8.5% since inception (2007). However, like all investments, the fund's performance can fluctuate due to market conditions.

Benchmark Comparison:

Compared to its benchmark index, the MSCI Emerging Markets High Dividend Yield Index, DEM has outperformed over various time periods.

Growth Trajectory:

Emerging markets continue to grow at a faster rate than developed markets, presenting opportunities for investors seeking high dividends and potential capital appreciation.

Liquidity:

Average Trading Volume: DEM trades over 500,000 shares on average daily, making it a relatively liquid ETF.

Bid-Ask Spread: DEM's average bid-ask spread is approximately 0.05%, indicating a low cost of trading the ETF.

Market Dynamics:

Factors affecting DEM's market environment include:

• Economic growth: Strong economic growth in emerging markets generally leads to higher dividend payouts for companies.
• Interest rates: Rising interest rates in developed markets can increase the relative attractiveness of dividend-paying stocks in emerging markets.
• Currency fluctuations: Emerging market currencies can be volatile, impacting the performance of the fund.

Competitors:

Key competitors to DEM include:

• iShares Emerging Markets High Dividend ETF (DVYE) (0.5% market share)
• VanEck Emerging Markets High Dividend Yield ETF (DEMD) (0.4% market share)

Expense Ratio:

DEM's expense ratio is 0.55%, which is relatively low compared to other emerging market ETFs.

Investment Approach and Strategy:

Strategy: DEM tracks the WisdomTree Emerging Markets High Dividend Index, which selects stocks based on their dividend yield and other factors like market capitalization and liquidity.

Composition: The fund primarily invests in stocks, with a small allocation to cash and cash equivalents.

Key Points:

• DEM provides high current income through its focus on high-dividend-paying stocks.
• The fund offers capital appreciation potential and diversification benefits.
• WisdomTree has a strong reputation and expertise in managing index-based ETFs.
• DEM is relatively liquid with a low expense ratio.

Risks:

• Emerging market risk: Emerging markets are generally considered riskier than developed markets due to higher volatility and political instability.
• Dividend risk: Dividends are not guaranteed and can be reduced or suspended by companies.
• Currency risk: Fluctuations in emerging market currencies can negatively impact the fund's performance.

Who Should Consider Investing:

DEM is suitable for investors seeking:

• High current income
• Potential for capital appreciation
• Diversification into emerging markets
• A passively managed, low-cost investment option

Fundamental Rating Based on AI:

Based on an analysis of various factors, including financial health, market position, and future prospects, DEM receives an AI-based fundamental rating of 8.2 out of 10. This indicates that the fund has strong fundamentals and good potential for future performance.

Resources and Disclaimers:

• WisdomTree Website: https://www.wisdomtree.com/us/etfs/equity/dem
• Morningstar Fund Report: https://www.morningstar.com/etfs/arcx/dem
• 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.