The $2 billion DEM, which is 10 and a half years old, selects stocks based on dividend yield, but weights its holdings on the basis of cash dividends paid. Some analysts believe emerging markets stocks can continue delivering upside for investors. Historical data points indicate the current bull market in emerging markets stocks could last awhile.
“Research from WisdomTree indicates that when the valuation gap between emerging markets and the S&P 500 is as large as it currently is, emerging markets tend to strongly outperform over the following five-year period. With earnings growth finally providing a lift to the group once again, large-cap dividend payers from the emerging markets nations are looking like a particularly attractive play heading into 2018,” according to ETF Daily News.
DEM features exposure to 20 countries with Taiwan and China combining for about 43% of the fund’s weight. The ETF is also known for frequently being overweight Russian stocks, a strategy that makes sense for a dividend fund because Russia is one of the largest dividend destinations among emerging markets. Russian stocks account for 13.7% of DEM’s roster.
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