ETF Chart of the Day: Emerging Market Dividends

June 29th at 10:52am by Paul Weisbruch, Street One Financial

Earlier this week we pointed out inflows that have resumed in Emerging Markets-based ETFs, including iShares MSCI Emerging Markets (NYSEArca: EEM) and Vanguard Emerging Markets (NYSEArca: VWO) in the past week or so.

While well off of their peak asset levels for 2012, the fact that both funds are attracting assets in the recent market environment is an encouraging sign for bulls and those on the sidelines looking for the market to embrace a more “risk on” posture.

Readers will recall that we highlighted stunning asset inflows in both EEM and VWO in the beginning of 2012 as the market was in full, unabated, “bull” rally mode from January through April.

Many of these flows have exited the funds, and the EM space in the past two months, but we are starting to see some signs of net creation activity in EM once again.

A related ETF, WisdomTree Emerging Markets High Yielding Equity (NYSEArca: DEM) for example has reeled in nearly $200 million in assets in recent sessions, which is equivalent to about 3% of the AUM outstanding in the fund.

In the trailing one year period, DEM has trumped both the larger EEM and VWO funds, as it has lost 16.44% versus EEM’s decline of 19.69% and VWO losing 19.60%.

Year to date, the performance figures look like the following: DEM -2.62%, EEM -1.24%, VWO up 0.28%.

Both EEM and VWO are based on the MSCI Emerging Markets Index, with heavy exposures to equities from countries including Brazil, Russia, India, and China for example.

DEM has a different methodology, as the ETF tracks a WisdomTree proprietary index which focuses on high yielding EM stocks rather than using a market cap weighted index approach (which is calculated using the price of a stock in an index multiplied by shares outstanding).

Currently, top holdings of the fund include ordinary shares of Taiwan Semiconductor, Companhia de Bebidas das Americas Ambev, Malayan Banking Berhad, Banco Santander Brasil SA, and Kumba Iron Ore Limited.

WisdomTree Emerging Markets High Yielding Equity


For more information on Street One ETF research and ETF trade execution/liquidity services, contact pweisbruch@streetonefinancial.com.

Tickers

DEM