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

 The strategy's effective investment philosophy supports an Above Average 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 liquidity exposure compared with category peers. High yield exposure is attributed to holding high dividend-paying or buyback stocks, and is suitable for income seekers outside of fixed-income. And a high liquidity exposure is rooted in stocks with higher trading volumes, lending managers more flexibility. 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

TransUnion

IQVIA Hlds

Becton, Dickinson and Co.

TransGlobe Energy

SAP SE

OUTFRONT Media

Meritage Homes

Aberdeen Income Credit Strategies Fund

WisdomTree Emerging Markets High Dividend Fund

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 SmCp Div Fd earns an Above Average Process Pillar rating. 

The largest 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. This can be seen in 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 skews toward smaller, more value-oriented companies compared with its average peer in the Diversified Emerging Mkts Morningstar Category. Examining 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. Given the high trading volume of holdings, this strategy has been exposed to liquid assets during these years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. This strategy also has tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over these years. Lacking this ballast, the fund's prospects could rest on its ability to beat peers during economic booms. In recent months, the strategy also had less Quality 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 industrials and basic materials relative to the category average by 8.3 and 5.6 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and communication services, underweight the average by 7.7 and 5.5 percentage points of assets, respectively. The strategy owns 973 securities and its assets are more dispersed than peers in the category. In particular, 8.1% of the portfolio's assets are concentrated in the top 10 fund holdings, compared to the typical peer's 25.3%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 53% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

WisdomTree’s equity  team is comparable to peers, resulting in an Average People Pillar rating. There’s a sizable bench of five managers listed on the fund. Together, they manage a total of 113 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential 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 improving, but its shaky global fund lineup and uncertain trajectory hold its rating to Below Average. 

WisdomTree’s research organization has long been a strength. Under CIO Jeremy Schwartz, the team has generated creative, economically sound ideas and evolved them into investable products, like the efficient core series. A recent focus on investor education spawned the Portfolio Analysis Tools Hub, an online platform that taps the team’s brainpower to help investors make better investment decisions.

The firm’s product lineup is a mixed bag. To complement its core lineup of fundamentally weighted strategies, WisdomTree has recently launched funds targeting established factors instead of trendy themes—an encouraging reorientation. Yet the shutdown of WisdomTree U.S. Growth and Momentum ETF calls WisdomTree’s commitment to these funds into question, and vestiges from its laxer product-development era look ripe for closure. Its European lineup features risky trading tools that are hard for investors to use well. 

WisdomTree’s future may hinge on WisdomTree Prime, its blockchain-based digital wallet. The launch reflects founder and CEO Jonathan Steinberg’s conviction in the disruptive potential of the blockchain. Prime shouldn’t hurt WisdomTree fund investors (most funds on the platform are zero-fee), but it may distract the firm from shoring up its core offering.

Below Average

Parent

WisdomTree Emerging Markets SmallCap Dividend Fund

DGS tracks a dividend-weighted index of small-cap, dividend-paying emerging market stocks.

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By Jeff Weniger, CFA, Head of Equity Strategy Key Takeaways South Korea's classification as an “emerging” or “developed” market affects funds' allocations, with some emerging markets funds having no exposure to the country. The “Korea Discount” refers to the low valuations placed on South Korea's stocks relative to stocks in other countries.

If Korea's Stock Market Follows Japan, Many Emerging Markets Funds Won't Have It

Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) is a smart beta exchange traded fund launched on 10/30/2007.

Is WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) a Strong ETF Right Now?

The WisdomTree Emerging Markets SmallCap Dividend Fund ETF has outperformed the broad EM index over several timeframes. DGS offers a high yield of 4.7% and has a favorable technical outlook, with a potential upside breakout target of $60.40. The portfolio of DGS is diversified, with exposure to sectors such as Information Technology and cyclical-value industries, and a focus on Southeast Asia.

Big Yield, Big EM Alpha With DGS

While the S&P 500 and other domestic large-cap benchmarks have been on impressive runs of late, the same isn't true of small caps. Over the past three years, the S&P SmallCap 600 Index is up just 2% while the Russell 2000 Index is off 4.5% over that span.

Looking for Sturdy Small Caps? The Answer Is Surprising

Is it time to invest abroad? U.S. equities remain an expensive proposition, even with the Magnificent Seven a key player in many portfolios.

Look Abroad in Small-Cap Dividend ETF DGS

DGS is an emerging market small-cap dividend ETF. The fund yields 4.5%, is cheaply valued, and has some momentum on its side. An overview and analysis of the fund leads me to a buy rating.

DGS: Emerging Markets Small-Cap Dividend ETF, Good Momentum And Yield, Cheap Valuation

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Small-cap ETFs are long-term outperformers – and should be on every investors' radar.

9 Small-Cap ETFs to Buy Now

Investors often think of EM equities as a more inefficient asset class than U.S. equities, with less analyst coverage. While the WisdomTree Emerging Markets SmallCap Dividend Index had positive returns from valuation change, the WisdomTree Emerging Markets High Dividend Index and the WisdomTree Emerging Markets Dividend Index each had negative returns from valuation change.

2023 Emerging Market Dividend Index Rebalances

WisdomTree Emerging Markets SmallCap Dividend Fund ETF has performed well but is currently vulnerable. The DGS ETF provides exposure to small-cap equities of dividend-paying companies in emerging markets. The fund has outperformed larger emerging market funds but has lagged behind the S&P 500 index.

DGS: A Momentum Reversal In An Otherwise Good Fund

iShares MSCI Emerging Markets ETF

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iShares MSCI India ETF

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By Hyun Kang, Research Analyst There was a lot of optimism for emerging markets (EM) equities heading into 2023. The long-awaited reopening of the Chinese economy was expected to bolster the country's equities and the EM asset class more broadly.

Emerging Markets Roundup

WisdomTree Emerging Markets SmallCap Dividend Fund holds 960 emerging markets dividend stocks. A risk score based on momentum and quality metrics intends to filter out yield traps. The fund has a large exposure to geopolitical risks.

DGS Has Outperformed Peers, But Beware Of Geopolitics

WisdomTree Emerging Markets SmallCap Dividend Fund ETF has generated above-average yield and also steady capital gains over the long run. Average annual total return of this EM fund also has been quite high. Default risk of DGS is low due to its investments in small-cap stocks from large economies that have relatively safe ratings on their sovereign bonds.

DGS: High-Yielding EM Fund Investing In Dividend Paying Small-Cap Stocks

While the Federal Reserve looks to keep inflation in check with interest rate hikes, it's keeping fixed income investors on their toes. In order to extract more income, it will take a higher tolerance for risk, offering opportunities in emerging markets (EM).

2 Options to Boost Income and Get EM Diversification

Most emerging market funds are highly exposed to large Chinese stocks. At the same time, few emerging market funds focus on dividend payers or small caps.

Want to Invest in Emerging Markets but Don't Know How? Try This ETF.

DGS is a small-cap dividend ETF in emerging markets. It has a nice yield, looks cheap, beats emerging markets benchmarks, but I see 2 major issues.

DGS: A 5% Yield With 2 Red Flags

WisdomTree's Office Hours is a weekly series for financial advisors that features the firm's thought leadership addressing contemporary happenings in markets and the economy.

WisdomTree's Office Hours Series Takes on Emerging Markets and the Fed

DGS invests in emerging market small-cap equities with strong dividends. Risks abound.

DGS: Emerging Markets Small-Cap Dividend ETF, Strong 6.6% Yield And Dividend Growth Track-Record, Cheap Valuation

DGS is a high yield fund in emerging markets. The strategy makes a lot of sense and it has beaten several competitors since inception.

DGS: High Yield International ETF With A Red Flag

The WisdomTree Emerging Markets SmallCap Dividend Fund is a very intriguing alternative option for investors who want to gain exposure to emerging market equities. Emerging markets are being plagued by rising inflation/interest rates, sluggish economic growth, and increased political risks. There will be plenty of time to accumulate strategically during any pullbacks experienced.

WisdomTree Emerging Markets SmallCap Dividend Fund: Accessing Emerging Market Growth

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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Advisors and investors are pivoting where their allocations are as they seek income in a challenging and volatile market. Investments geared towards inflation, dividends, and currency all took the top spots for flows into WisdomTree funds in the month of March.

The Top 5 WisdomTree ETFs by Flows for March

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Over the last 29 years, U.S. exchange-traded fund (ETF) assets have grown to more than $7.2 trillion across more than 7,600 funds. They've become the product of choice for individual and institutional investors alike.

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With money flowing and pivoting within markets as volatility continued in January, many investors sought hedges, havens, and diversification with their investments. The following are the top five ETFs by flows for WisdomTree in the month of January.

The Top 5 Performing WisdomTree ETFs in January

DGS's screening mechanism and the fact that small-caps are less generous with their capital distributions make this an intriguing pick.

News for WisdomTree Emerging Markets SmallCap Dividend Fund ETF (DGS)