WisdomTree's New Emerging Markets ETF: Exposure to Asian Dry Bulk Shipping

Nov.12.07 | About: WisdomTree Emerging (DGS)

I've taken a look at the newest Wisdom Tree ETF, the WisdomTree Emerging Markets Smallcap Dividend Fund (NYSE:DGS), and I've noticed that it has an unusual high exposure to dry bulk shipping companies from southeast Asia:

  • U-Ming Marine Transport Corporation (1.52%): Taiwan
  • Yang Ming Marine Transport Corp. (1.48%): Taiwan
  • Evergreen Marine Corp (1.46%): Taiwan
  • Wan Hai Lines Ltd (1.17%): Taiwan
  • Malaysian Bulk Carriers (0.90%): Malaysia
  • Precious Shipping Public Company Ltd (0.47%): Thailand
  • Sincere Navigation Corporation (0.33%): Taiwan
  • Regional Container Lines PCL (0.25%): Thailand

TOTAL = 7,58%

It looks like this is the first ETF around with such a high percentage of holdings in the shipping industry; not even the Dow Jones Transportation ETF (NYSE:IYT) is comparable, because its only pure play holding is Overseas Shipholding Group (NYSE:OSG) which is engaged primarily in the ocean transportation of crude oil, so it has nothing to do with drybulk shipping.

Drybulk stocks have been quite hot recently, and if we combine them with southeast Asia, it sounds like an explosive cocktail; so, if you can't buy Asian shipping securities directly, this might be the best proxy around.

Disclosure: Author has a long position in some of the above-mentioned securities