“Low volatility is a really compelling strategy because it seems over the long run low volatility strategies will offer you above the market return, but with about less risk. So I think it’s really promising strategy to apply especially in the more volatile markets right now,” Lee said in a video interview.
For developing markets, the Morningstar ETF analyst says he favors WisdomTree Emerging Markets Equity Income (NYSEArca: DEM). The popular fund has raked in $2.4 billion of inflows so far this year, according to Index Universe data. [Emerging Market Dividend ETFs: How to Choose the Right Fund]
DEM has an expense ratio of 0.63% and is paying a SEC 30-day yield of 4.2%, according to sponsor WisdomTree (NasdaqGM: WETF). The fund holds assets of $4.4 billion.
“There is higher turnover, but I think that the value tilt and the dividend tilt are very useful especially in the emerging markets because emerging markets are countries in which accounting standards are not as clear, as uniform, and their balance sheets are not as transparent,” Lee said. “And not only that, but management may not be as well-aligned with shareholders as they are in U.S. companies. So if you own dividend-paying stocks, then you’re buying stocks in companies where management’s interests and your interests are more well-aligned.”
WisdomTree Emerging Markets Equity Income
