WisdomTree Emerging Markets High Div ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in yield exposure and an underweight in quality exposure compared with category peers. High yield exposure is attributed to holding more stocks with high dividend or buyback yields. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm a Below Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

VictoryShares Emerging Market Volatility Wtd ETF

Fisker

ReneSola

Aduro BioTech

Grupo Aeroportuario del Centro Norte

Asbury Automotive Group

TransUnion

Adams Natural Resources Fund Inc

Vodafone Group

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. WisdomTree Emerging Markets High Div Fd earns a High Process Pillar rating. 

The main contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Impressive risk-adjusted performance also supports the rating, as shown by the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk.

 This strategy tends to hold smaller, more value-oriented companies than its average peer in the Diversified Emerging Mkts Morningstar Category. Looking at additional factor exposure, this strategy has continually had more high-yield exposure than the Morningstar Category average during recent years, with the portfolio holding more stocks with high dividend or buyback yields. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. The strategy has also had a defensive tilt, demonstrated by lower exposure to the quality factor than peers in recent years. This means the fund has avoided holding companies that are consistently profitable, growing, and have solid balance sheets.  Lacking this ballast, the fund's prospects will rest on its ability to surpass peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. In addition, this strategy has an underweight bias to the volatility factor, meaning investing in stocks that have a lower standard deviation of returns. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. In recent months, the strategy also had less Volatility factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in energy and basic materials relative to the category average by 16.4 and 8.0 percentage points, respectively. The sectors with low exposure compared to category peers are consumer cyclical and communication services, underweight the average by 9.4 and 6.3 percentage points of assets, respectively. The portfolio is composed of 491 holdings and is quite concentrated. Specifically, 29.3% of the fund’s assets are housed within the top 10 holdings, compared to the typical peer's 27.2%. And finally, in terms of portfolio turnover, this portfolio's holdings turn over more often than comparable products in its peer group, possibly resulting in higher costs for investors and a drag on performance.

High

Process

WisdomTree’s equity team is good but unexceptional, earning the strategy an Average People Pillar rating. There’s a sizable bench of five managers listed on the fund. Together, they manage a total of 111 strategies, with solid long-term prospects. The strategies average a Silver asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Average

People

WisdomTree is an exchange-traded fund provider whose proprietary indexes underpin many of its funds. After the firm's core lineup of fundamentally weighted funds lost its luster in a difficult value environment, WisdomTree faces an identity crisis.

WisdomTree has plugged the holes in its value-oriented lineup with trendy thematic funds. Offerings that aim to capitalize on hot topics like cloud computing and genetic advancement fall outside the firm's realm of expertise and look like Band-Aids to curb outflows, not well-vetted long-term investments. Predictably, this point-and-shoot product-development approach had led WisdomTree to shut down funds at a lofty rate.

Bucking an industrywide, investor-friendly trend, WisdomTree has modestly trimmed fees on just a handful of funds. Such stubbornness calls into question whether the publicly traded firm prioritizes fundholders' or shareholders' interests. Recent inflows have helped, but severe outflows over the late 2010s have weakened the firm's financial position over the past several years.

The firm's research organization remains a highlight. Despite scattershot product launches, the team has demonstrated the ability to also hatch economically sound ideas and develop them into practicable products, like its funds that mechanically exclude state-owned enterprises. 

WisdomTree's commitment to investor education is another plus. Its Advisor Solutions platform, launched in 2016, provides advisors with a wealth of resources, and recent partnerships with Onramp Invest and Gemini should help advisors navigate cryptocurrency complexity. WisdomTree can read its clients' needs, but its trendy fund lineup shows that it's too willing to cater to their wants. It retains its Below Average rating.

Below Average

Parent

WisdomTree Emerging Markets High Dividend Fund

DEM tracks a dividend-weighted index of emerging market stocks ranked in the top 30% by dividend yield.

Emerging markets stocks are struggling again in 2022, but some better areas could morph into leaders if global equities rebound. Emerging markets dividend payers top that list of ideas.

Emerging Markets Dividend Proposition Increasingly Attractive

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Nearly four months into 2022, EM is lagging the S&P 500 for the fifth consecutive year and lagging the MSCI ACWI by over 150 basis points. The WisdomTree Emerging Markets High Dividend Index has outperformed the MSCI Emerging Markets Index by over 1,000 bps.

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During a recent ETF Trends webcast focused on emerging markets, 42% of advisor respondents said that they allocate between 5% and 10% of client assets to emerging markets, and an additional 11% reported taking an even more aggressive approach. However, the majority were using broad emerging market ETFs to gain exposure.

Some Emerging Market ETFs Are Shining

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Emerging markets stocks are struggling again this year, but that's painting with broad strokes. Investors taking the time to conduct further examination will find pleasant surprises in the form of Latin American stocks.

Evaluate EDOG for Latin American Exposure

Experienced dividend investors know that a plethora of ex-U.S. regions offer bigger yields than are found on broad-based domestic equity benchmarks. Emerging markets are part of that conversation.

The Right ETF for Big EM Dividends

The WisdomTree Emerging Markets High Dividend ETF (DEM) offers a well-diversified and high yield option for investors looking for exposure to emerging markets without wanting too much exposure to China.

DEM: High Yield With Huge Long-Term Upside

Apple

iShares MSCI ACWI ETF

Bank of America

Charter Communications

WisdomTree Global High Dividend Fund

WisdomTree U.S. High Dividend Fund

WisdomTree International High Dividend Fund

iShares MSCI EAFE ETF

General Electric

Alphabet

Home Depot

iShares Russell Top 200 ETF

iShares Russell 2000 ETF

iShares Russell 3000 ETF

JPMorgan Chase & Co

Microsoft

Procter & Gamble

iShares MSCI EAFE Small-Cap ETF

SPDR S&P 500 ETF Trust

Walmart

More than $14 billion has flown into dividend-focused ETFs in the first two months of the year, compared to less than $2 billion over the same period in 2021.

February Dividend Update: Outperformance Continues

Emerging markets assets are dealing with bumps in the early innings of 2022, but with valuations looking attractive, investors may want to consider nibbling at the long-criticized asset class. A potentially safe way of doing that is by commanding the power of dividends.

Playing It Safe in Emerging Markets

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iShares International Select Dividend ETF

ProShares S&P MidCap 400 Dividend Aristocrats ETF

Interest rates will rise in 2022. It shouldn't make dividend ETFs any less attractive.

7 Dividend ETFs to Buy For the Long Haul

iShares MSCI ACWI ex U.S. ETF

Fidelity International High Dividend ETF

iShares Core High Dividend ETF

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Energy Select Sector SPDR Fund

These products have had a good year so far due to their energy tilt.

High Dividend ETFs Get Energy Boost

When looking to combat rising inflation in the U.S., investors typically turn to domestic assets, but when properly structured, emerging markets can offer market participants some buffer against soaring consumer prices. The WisdomTree Emerging Markets High Dividend Fund (NYSEArca: DEM) is an example of an exchange traded fund that, in this case, checks the properly structured [.

This EM ETF Has Inflation-Fighting Capabilities

Following dark days in 2020, global dividends rebounded by 21% last year, and emerging markets got in on the act. In fact, dividend-payers provided a superior avenue for emerging markets equity exposure last year.

Emerging Markets Dividends Can Reward Again in 2022

With the widely followed MSCI Emerging Markets Index down 6% year-to-date, it's understandable that investors aren't enthusiastic about emerging markets equities heading into 2022. Some professional investors are expressing the same sentiment, further compounding retail investors' trepidation about developing economies in 2022.

A Prudent Approach to Emerging Markets in 2022

DEM strategy and portfolio. Past performance vs. competitors.

DEM: High Yield From Emerging Markets

Emerging markets (EM) economies have shifted their compositions in the past decade, becoming less dependent on exporters and commodity-driven companies. But recent performance has shown how some of these economies can thrive in a commodity boom such as the one we've seen in 2021.

Leaning Into Emerging Markets Value

There's still a case for emerging markets equities, though that forest is hard to see through the trees of China's regulatory risk. There's also still a case for emerging markets dividends.

Seeing the Emerging Markets Forest Through China's Trees

The WisdomTree Emerging Markets High Dividend ETF makes for a consistent, non-volatile, and steady fund for income investors. That said, its 4-Year average dividend yield is lower than one of its peers, the iShares Emerging Markets Dividend ETF.

DEM: A Steady Bet For Income Investors

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The widely observed MSCI Emerging Markets Index is up 7% year-to-date. That's decent, but investors opting for emerging markets exchange traded funds with deeper cyclical value tilts could be doing a lot better.

An ETF Strategy to Make the Most of Emerging Markets

DEM tracks the WisdomTree Emerging Markets High Dividend Index, a fundamentally-weighted one. An equity's weight in the index depends on the annual cash dividends paid. DEM is overweight in financials, materials, and information technology, which account for 27.6%, 21%, and 14.8% of the NAV, respectively.

DEM: Nice Choice For EM Bulls

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Largely tied to the fate of the US dollar, the underperformance of emerging markets relative to their developed counterparts may finally be ending. A rising US dollar causes the domestic currency of emerging economies to fall and inflation to rise amid weaker economic growth.

Emerging Markets: The Trade Of The Next Decade

WisdomTree Emerging Markets High Dividend ETF provides income investors the chance to gain exposure to emerging markets all cap equity of high dividend yielding companies. A compelling proposal for income investors looking to transition from active management emerging market strategies to more passive ones.

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