The WisdomTree Emerging Markets SmallCap Dividend ETF (DGS) made its debut on 10/30/2007, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $1.77 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, DGS seeks to match the performance of the WisdomTree Emerging Markets SmallCap Dividend Index.
The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of primarily small cap stocks selected from the WisdomTree Emerging Markets Dividend Index. Companies included in the Index fall within the bottom 10% of total market capitalization of the WisdomTree Emerging Markets Dividend Index.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for DGS are 0.58%, which makes it on par with most peer products in the space.
DGS's 12-month trailing dividend yield is 3.76%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Innolux Corpaccounts for about 1.28% of the fund's total assets, followed by Growthpoint Properties Ltd (GRT) and Compeq Manufacturing Co.
DGS's top 10 holdings account for about 9.57% of its total assets under management.
Performance and Risk
The ETF has added roughly 13.87% so far this year and it's up approximately 19.25% in the last one year (as of 07/03/2026). In the past 52-week period, it has traded between $54.85 and $66.60
The fund has a beta of 0.61 and standard deviation of 14.88% for the trailing three-year period, which makes DGS a medium risk choice in this particular space. With about 1030 holdings, it effectively diversifies company-specific risk .
Alternatives
WisdomTree Emerging Markets SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Emerging Markets Stock Index Fund ETF Shares (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard Emerging Markets Stock Index Fund ETF Shares has $120.03 billion in assets, iShares Core MSCI Emerging Markets ETF has $153.85 billion. VWO has an expense ratio of 0.06% and IEMG changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs
Bottom Line
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WisdomTree Emerging Markets SmallCap Dividend ETF (DGS): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).