ETF Trends Editor Tom Lydon speaks with WisdomTree’s (NasdaqGM: WETF) Director of Research, Jeremy Schwartz, about an important development in the ETF business — the emergence of benchmarks that weight stocks by alternative factors such as dividends and volatility.

A vast majority of the assets in the ETF industry are tied to one strategy: market-cap-weighted indices.

“People are starting to wonder if that’s a sensible thing,” Schwartz explains. “We don’t think that’s common sense.” [Dividend ETF Yield is Critical]

WisdomTree, which reports quarterly earnings on Friday, believes investors should start diversifying away from cap-weighted strategies, and dividends are a compelling alternative.

“It’s part of a natural evolution,” Schwartz said.

The WisdomTree executive also tells Lydon why emerging markets are attractive based on debt levels, demographics, dividends, growth trends and other factors.

Watch the video to see the full interview.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.