Spotlight On WisdomTree Emerging Markets High Yielding Equity ETF

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 |  About: WisdomTree Emerging Markets Equity Income ETF (DEM)
by: Tom Lydon

ETF spotlight on WisdomTree Emerging Markets High Yielding Equity (NYSEARCA:DEM), part of an ongoing series.

Assets: $1.9 billion.

Objective: The WisdomTree Emerging Markets Equity Income Fund tries to reflect the WisdomTree Emerging Markets Equity Income Index, which is a fundamentally weighted index that holds the highest dividend yielding stocks selected from emerging markets.

Holdings: Top holdings include: Taiwan Semiconductor Manufacturer 3.96%, Cia de Bebidas das Americas 2.95%, Banco do Brasil 2.90%, Banco Santander Brasil 2.44% and Kumba Iron Ore 2.36%.

What You Should Know:

  • WisdomTree Investments sponsors the fund.
  • DEM has an expense ratio of 0.63%.
  • Sector allocations include: financials 25.88%, telecom services 20.77%, information tech 13.23%, materials 10.10%, utilities 9.83%, consumer staples 6.95%, industrials 5.02%, energy 4.28% and consumer discretionary 3.62%.
  • Top 10 country allocations include: Taiwan 21.71%, Brazil 20.19%, South Africa 9.01%, Malaysia 8.92%, Chile 5.10%, South Korea 4.35%, Israel 4.23%, Turkey 3.82%, Thailand 3.76% and Czech Republic 3.45%.
  • The ETF has a 12-month yield of 4.52%.
  • The fund is up 1.12% over the last month, down 0.93% over the past three months and down 8.55% year-to-date.
  • “[The fund] is a straightforward measure of value that is not affected by variances in accounting standards across countries,” Patricia Oey, Morningstar analyst, said. “High-yield stocks have historically outperformed no- and low-yield stocks in most countries studied, a manifestation of the well-known value premium.”
  • “This fund’s sector weights provide good exposure to local growth trends,” Oey added. “It has lower weightings in energy and materials companies, sectors more exposed to the global economy, and higher weightings in telecoms and financials, sectors more leveraged to local trends.”

The Latest News:

  • DEM is trying to break through its 50-day exponential moving average.
  • Morgan Stanley analysts believe emerging market stocks may increase 39% by the end of 2012, aided by a “soft landing” in China, earnings growth and cheap valuations, according to an Economic Times report.
  • “Inflation is probably going to fall going forward and we hope for a soft landing in growth,” Jonathan Garner, Morgan Stanley’s chief emerging-market and Asia strategist, said. “We should be in a better environment for the stock market.”
  • “We suspect the rally has already begun from the low in early October,” Garner added. “We expect a soft landing in China and earnings growth should hold up very well in this environment, we think the market is too cheap.”

WisdomTree Emerging Markets High Yielding Equity ETF

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Max Chen contributed to this article.

Disclosure: None