A smart beta exchange traded fund, the WisdomTree Emerging Markets High Dividend ETF (DEM) debuted on 07/13/2007, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Because the fund has amassed over $3.22 billion, this makes it one of the larger ETFs in the Broad Emerging Market ETFs. DEM is managed by Wisdomtree. This particular fund, before fees and expenses, 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.63% for this ETF, which makes it on par with most peer products in the space.
DEM's 12-month trailing dividend yield is 4.79%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Us Dollar accounts for about 55.91% of total assets, followed by Taiwan Dollar and Polish Zloty.
Its top 10 holdings account for approximately 103.78% of DEM's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Emerging Markets High Dividend ETF return is roughly 18.78% so far, and it's up approximately 15.88% over the last 12 months (as of 09/15/2025). DEM has traded between $37.51 $47.29 in this past 52-week period.
The fund has a beta of 0.62 and standard deviation of 14.98% for the trailing three-year period, which makes DEM a medium risk choice in this particular space. With about 514 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 $100.28 billion in assets, iShares Core MSCI Emerging Markets ETF has $106.87 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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