Small cap emerging market exposure

With a dividend yield of 4.27%, the WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) is ideal for emerging market investors who wish to generate returns through in investing in the local economy. The fund tracks the performance of the WisdomTree Emerging Markets SmallCap Dividend Index and offers an opportunity to access small cap emerging markets equities. It, therefore, serves as a nice complement to funds such as the iShares MSCI Emerging Markets ETF (EEM) or the Vanguard FTSE Emerging Markets ETF (VWO) that are largely invested in large cap stocks.

Moreover, small cap stocks are considered better pure plays on the local economy; that is, more reflective of domestic consumption patterns. So, DGS is a nice option for dividend investors looking for small cap emerging market exposure.

The fund, managing over $1.1 billion in assets, has an expense ratio of 0.63%. Top institutional owners of the fund include USAA Investment Management Company, Halbert, Hargrove/Russell LLC, and UBS Columbia Management Company, which own 4.06%, 3.90%, and 3.67% of the total shares of DGS, respectively.

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Year-to-date (April 27, 2017), the WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) has returned 15.03% to its investors; up 16.52% over the past year.

DGS Portfolio highlights

  • 91% of the fund’s assets are invested in the Emerging markets (EEM) (VWO).
  • Asia (AAXJ) (67%), Latin America (ILF) (10%), and Africa (GAF) (9%) form the top 3 markets that the fund in invested in. Taiwan (EWT), China (FXI), and Thailand (THD) are top markets.
  • Consumer Cyclical (16%), Technology (15%), and Industrials (15%) dominate the DGS portfolio.
  • Invested in a good mix of large cap (19%), mid cap (54%), small cap (21%), micro cap (4%), and cash (1%).
  • Top 5 equity holdings of the fund include:
ADR TickerNameCountryWeight (%)SectorYTD Return (April 27)
 NATransmissora Alianca de Energia Eletrica SABrazil1.21Utilities NA
 NAHighwealth Construction Corp.Taiwan0.96Financials NA
SHPHYSihuan Pharmaceutical Holdings Group LtdChina0.92Healthcare NA
GZUHFGuangzhou R&F PropChina0.86Financials13.89%
 NASunac China Holdings LtdChina0.80Real Estate NA
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