• WT EM Equity Income and EM Small Dividends Still Positive4
o EM Equity Income: Of the Indexes shown, this one can be characterized as the valuation hunter. Some of the least expensive, largest payers of cash dividends within emerging markets are those within the Russian Energy sector, which was hit with negative headline risk in March 2014 and then again in July 2014. It’s worth noting the positive performance shown within the chart for this diversified Index even with those exposures.
o EM Small Dividends: A dividend-weighted approach to emerging market small caps has tended toward a large weight in Taiwanese small caps and barely any weight to India’s small caps. This year, India’s small caps have been on fire, and Taiwan’s have been lackluster. Still, a year-to-date return of 9% is strong.
WisdomTree Is Excited about Emerging Market Equities
We remain excited about the valuations represented within emerging markets today compared to other global markets. The dispersion in performance across the WisdomTree Indexes mentioned speaks, in our view, to their unique exposures. We’ve emphasized broader signs of strength, and in future blogs we will dig a bit deeper into China and Russia—two markets that have often been in focus in 2014—to further characterize what we believe to be an exciting opportunity in emerging markets today.
1Source: Bloomberg. Refers to the 12/31/12 to 12/31/13 performance of the MSCI Europe, MSCI Japan and S&P 500 Indexes, respectively.
2Source: Bloomberg. Refers to the 12/31/12 to 12/31/13 performance of the MSCI Emerging Markets Index.
3Source for all sub-bullets: Bloomberg, with data from 12/31/13 to 7/25/14.
4Source for all sub-bullets: Bloomberg, with data from 12/31/13 to 7/25/14.
Important Risks Related to this Article
Investments in emerging, offshore or frontier markets are generally less liquid and less efficient than investments in developed markets and are subject to additional risks, such as risks of adverse governmental regulation and intervention or political developments. Investments focusing on certain sectors and/or smaller companies increase their vulnerability to any single economic or regulatory development. Dividends are not guaranteed and a company’s future ability to pay dividends may be limited. A company currently paying dividends may cease paying dividends at any time. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty.