However, since DEM’s mid-2007 inception, it has earned higher absolute and risk-adjusted returns than the market-weighted MSCI Emerging Markets Index, says Morningstar analyst Patricia Oey.
“This outperformance, combined with DEM’s relatively lower volatility, suggests that a dividend-focused strategy is an attractive way to gain access to the emerging markets,” she wrote in an analyst report on DEM.
“The typical arguments for dividend investing also apply to the emerging markets. Dividends are the largest contributors to total return for investors over the long term and can also signal effective management and healthy fundamentals,” Oey said. “The portfolio is rebalanced once a year on May 31, under which the fund can benefit from a ‘buy low, sell high’ effect for some holdings.”
WisdomTree Emerging Markets Equity
