WisdomTree Emerging Market SmallCap Fund ETF (NYSEArca: DGS) follows a dividend-weighted index, which holds value-oriented small-cap stocks. DGS has an expense ratio of 0.63%.
“Since this fund’s inception, it has earned higher absolute and risk-adjusted returns than the market-weighted MSCI Emerging Markets Small Cap Index,” Oey said. “This outperformance, combined with DGS’s relatively lower volatility, suggests that a dividend-focused strategy could be a viable strategy in emerging markets.”
Top holdings include Pretoria Portland Cement 1.1%, Cia de Saneamento de Minas 1.1% and Life Healthcare Group Holdings 1.0%. Top sectors include financials 21.7%, industrials 19.4% and consumer discretionary 13.3%. Top country weightings include Taiwan 25.3%, Thailand 13.0% and South Africa 10.8%.
Oey also noted that the high weighting in financials should benefit from greater demand from consumer banking and property development tied to consumer growth.
For more information on developing countries, visit our emerging markets category.
Max Chen contributed to this article.