Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the WisdomTree Emerging Markets High Dividend ETF (DEM) is a smart beta exchange traded fund launched on 07/13/2007.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $3.09 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree Emerging Markets High Dividend Index.
The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of the highest dividend yielding stocks selected from the WisdomTree Emerging Markets Dividend Index.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.63% for DEM, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.91%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Us Dollaraccounts for about 66.36% of the fund's total assets, followed by Euro and Hungarian Forint.
Its top 10 holdings account for approximately 109.37% of DEM's total assets under management.
Performance and Risk
The ETF has added about 15.94% and it's up approximately 7.87% so far this year and in the past one year (as of 07/15/2025), respectively. DEM has traded between $37.51 and $46.16 during this last 52-week period.
The ETF has a beta of 0.60 and standard deviation of 15.15% for the trailing three-year period, making it a medium risk choice in the space. With about 512 holdings, it effectively diversifies company-specific risk .
Alternatives
WisdomTree Emerging Markets High Dividend ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $91.85 billion in assets, iShares Core MSCI Emerging Markets ETF has $97.69 billion. VWO has an expense ratio of 0.07% and IEMG changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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WisdomTree Emerging Markets High Dividend ETF (DEM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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