International telecommunication firms are in a good position to benefit from the fast growth of emerging markets, as are many investors. The WisdomTree International Communications Sector Fund (DGG) ETF tracks its namesake index and invests in advertising, internet, media and telecom dividend-paying companies outside the U.S. and Canada, reports Marie Bereens of Investor's Business Daily. With a dividend yield of 4.5%, it has returned 16% since its launch in October.
The good thing about ETFs is they're continuing to grow, and they're covering more and more sectors, so they're slicing the pie into smaller and smaller pieces. There really isn't another international communications or telecommunications ETF out there, so DGG owns the space. While domestic growth of these megacaps will be mediocre at best, these companies face great opportunities by setting up shop in Eastern Europe. We're in a situation where especially in emerging markets countries- Eastern Europe, Latin America, Asia- you're seeing more and more demand from a telecommunications standpoint. With less than 30% of the Chinese population owning cell phones, there is still plenty of room for growth.
DGG 3 month chart