DEM's Dividend Yield Is At Global Financial Crisis Levels

Dzmitry Skazau/iStock via Getty Images

By Jeff Weniger, CFA

I'll conscionable get correct to it: successful nan history of our dataset, we person nary grounds of nan WisdomTree Emerging Markets High Dividend Fund (DEM) offering a dividend yield arsenic ample arsenic what it has been posting successful caller months. It's showing a backward-looking 10.6% output successful our Digital Portfolio Developer tool.

The capacity information quoted represents past capacity and is nary guarantee of early results. Investment return and main worth of an finance will up and down truthful that an investor's shares, erstwhile redeemed, whitethorn beryllium worthy much aliases little than their original cost. Current capacity whitethorn beryllium little aliases higher than nan capacity information quoted. For nan astir caller month-end performance, please click here.

Meantime, utilizing nan trailing yield, we person nary grounds of it having this ample of a spread comparative to nan MSCI Emerging Markets Index, nor do we person immoderate precedent for it being this overmuch higher than nan output connected nan S&P 500.

In fig 1, I put nan yellowish circles connected DEM's erstwhile grounds precocious yield, astir 10%, which came successful October 2008. Recall that Lehman Brothers collapsed successful nan anterior month.

Figure 1: DEM's Dividend Yield

The point astir nan 10.6% trailing output is it captures immoderate anomalies successful nan Energy patch, nan champion illustration being a 59% dividend output connected Petrobras, which comprises 3.4% of DEM. We recovered that nan median expert estimated output connected that patient is 15%.

DEM Needs nan Dollar to Behave

For DEM and different emerging equity costs to activity out, we will request nan greenback to abide. Though it wouldn't beryllium nan first clip a beardown rate sewage stronger, USD is truthful costly that doing truthful will beryllium an uphill climb. Its existent effective speech complaint (REER) revisited its 2001 highest a fewer months ago.

Figure 2 shows what happened aft 2001.

The move of nan period marked a bully introduction constituent for some emerging markets and value. It was precisely nan incorrect clip to beryllium dense successful nan U.S. and/or biased toward maturation stocks.

Figure 2: Emerging Markets Value Stocks Are Beating U.S. Growth Stocks Again

Things to Know astir DEM

We precocious surpassed $2 cardinal successful this one, which you should dainty arsenic a classical deep-value fund. To telephone it a "hunt for yield" money is appropriate. To beryllium agelong DEM, you should work together pinch nan thesis that has nan marketplace "on" dividends and "off" groups specified arsenic biotech and unprofitable communicative stocks. We judge DEM is for a classical worth investor.

If you tally DEM done nan Digital Portfolio Developer Fund Comparison tool, type successful MXEF for nan MSCI Emerging Markets Index and "500" to bring up nan S&P 500. That will fto you replicate nan first floor plan successful this blog station while besides presenting a deeper look astatine a ton of basal information.

Unless different stated, each information arsenic of 12/31/22.

Important Risks and Disclosure Related to this Article

There are risks associated pinch investing, including nan imaginable nonaccomplishment of principal. Foreign investing involves typical risks, specified arsenic consequence of nonaccomplishment from rate change aliases governmental aliases economical uncertainty. Funds focusing connected a azygous assemblage mostly acquisition greater value volatility. Investments successful emerging, offshore aliases frontier markets are mostly little liquid and little businesslike than investments successful developed markets and are taxable to further risks, specified arsenic risks of adverse governmental regulation, involution and governmental developments. Due to nan finance strategy of this Fund, it whitethorn make higher superior summation distributions than different ETFs. Dividends are not guaranteed, and a institution presently paying dividends whitethorn cease paying dividends astatine immoderate time. Please publication nan Fund's prospectus for circumstantial specifications regarding nan Fund's consequence profile.

Jeff Weniger, CFA, Head of Equity Strategy

Jeff Weniger, CFA serves arsenic Head of Equity Strategy astatine WisdomTree. In his role, Weniger helps to formulate nan firm's banal marketplace outlook by assessing macro and basal trends. Prior to joining WisdomTree, he was Director, Senior Strategist astatine BMO, wherever he worked successful nan agency of nan CIO from 2006 to 2017. He served connected nan firm's Asset Allocation Committee and co-managed nan firm's ETF exemplary portfolios for some nan U.S. and Canada. In 2013, astatine nan property of 32, Jeff was chosen arsenic nan youngest personnel of BMO's Global Investment Forum, which collected nan firm's apical world strategists to formulate nan firm's charismatic semipermanent outlook for finance trends and markets. Jeff has a B.S. successful Finance from nan University of Florida and an MBA from Notre Dame. He has been a CFA charterholder and a personnel of nan CFA Society of Chicago since 2006. He has appeared successful various financial publications specified arsenic Barron's and nan Wall Street Journal and makes regular appearances connected Canada's Business News Network (BNN) and Wharton Business Radio.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

WisdomTree launched its first ETFs successful June of 2006, and is presently nan industry's 5th largest ETF provider. The WisdomTree Seeking Alpha floor plan will characteristic contented by immoderate of our starring analysts including: Luciano Siracusano: Luciano Siracusano is WisdomTree's Chief Investment Strategist and Head of Sales. He is nan co-creator pinch CEO Jonathan Steinberg of WisdomTree's patented Indexing methodology and has led nan firm's income unit since 2008. Luciano is simply a regular impermanent connected CNBC and FOX Business, and speaks often connected ETFs, indexing and world financial markets. A erstwhile equity expert astatine ValueLine, Luciano began his profession arsenic a speechwriter for erstwhile New York Governor Mario Cuomo and HUD Secretary Henry Cisneros. He graduated from Columbia University pinch a B.A. successful Political Science successful 1987. Jeremy Schwartz: As WisdomTree’s Director of Research, Jeremy Schwartz offers timely ideas and timeless contented connected a bi-monthly basis. Prior to joining WisdomTree, Jeremy was Professor Jeremy Siegel's caput investigation adjunct and helped pinch nan investigation and penning of Stocks for nan Long Run and The Future for Investors. He is besides nan co-author of nan Financial Analysts Journal insubstantial “What Happened to nan Original Stocks successful nan S&P 500?” and nan Wall Street Journal article “The Great American Bond Bubble.” Christopher Gannatti: Christopher Gannatti began astatine WisdomTree arsenic a Research Analyst successful December 2010, moving straight pinch Jeremy Schwartz, CFA®, Director of Research. He is progressive successful creating and communicating WisdomTree’s thoughts connected nan markets, arsenic good arsenic analyzing existing strategies and processing caller approaches. Christopher came to WisdomTree from Lord Abbett, wherever he worked for 4 and a half years arsenic a Regional Consultant. Rick Harper: Rick Harper serves arsenic nan Head of Fixed Income and Currency for WisdomTree Asset Management, wherever he oversees fixed income and rate products developed done our collaborations pinch nan BNY Mellon Corporation and Western Asset Management. Rick has complete 19 years finance acquisition successful strategy and portfolio guidance positions astatine salient finance firms. Prior to joining WisdomTree successful 2007, Rick held elder level strategist roles pinch RBC Dain Rauscher, Bank One Capital Markets, ETF Advisors, and Nuveen Investments. Bradley Krom: Bradley Krom joined WisdomTree arsenic a personnel of nan Fixed Income and Currency squad successful December 2010. He is progressive successful creating and communicating WisdomTree’s thoughts connected rate and fixed income markets, arsenic good arsenic analyzing existing and caller money strategies. Prior to joining WisdomTree, Bradley served arsenic a elder trader connected a proprietary trading table astatine TransMarket Group. Tripp Zimmerman, Research Analyst Tripp Zimmerman began astatine WisdomTree arsenic a Research Analyst successful February 2013. He is progressive successful creating and communicating WisdomTree’s thoughts connected nan markets, arsenic good arsenic analyzing existing strategies and processing caller approaches. Prior to joining WisdomTree, Tripp worked for TD Ameritrade arsenic a fixed income specialist. Tripp besides worked for Wells Fargo Advisors, TIAA-CREF and Evergreen Investments successful various finance related roles. Tripp graduated from The University of North Carolina astatine Chapel Hill pinch a dual grade successful Economics and Philosophy. Tripp is simply a holder of nan Chartered Financial Analyst designation. Jonathan Steinberg, CEO Prior to establishing WisdomTree, Jonathan founded, and served arsenic Chairman and CEO of Individual Investor Group, Inc. From 1998 to 2004, he held nan domiciled of Editor-in-Chief of Individual Investor and Ticker magazines. Before his entrepreneurial accomplishments, Jonathan was an Analyst successful nan Mergers & Acquisitions section astatine Bear Stearns & Co. He attended The Wharton School astatine nan University of Pennsylvania and is nan writer of Midas Investing, published by Random House successful 1996. Zach Hascoe, Capital Markets Zach Hascoe began astatine WisdomTree successful August 2010, and useful straight pinch David Abner, Head of Capital Markets. The Capital Markets group is progressive successful each aspects of nan WisdomTree ETFs including merchandise development, helping to seed and bring caller products to market, arsenic good arsenic trading strategies and champion execution strategies for nan customer base. Zach useful intimately pinch nan trading and liquidity organization and does analytics connected ETF baskets and nan superior markets. He is simply a predominant contributor to nan WisdomTree blog connected topics related to nan superior markets, liquidity, building and champion execution. In addition, he manages nan hedge money relationships for nan firm. Zach received a B.A. from Bucknell University and was Captain of nan Bucknell Tennis Team.