Emerging Market Small Caps Are Absolutely On Fire
From Zacks: For investors seeking momentum, WisdomTree Emerging Markets Small Cap Dividend ETF (DGS) is probably on radar now. The fund just hit a 52-week high and is up over 31% from its 52-week low price of $33.34/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed.
DGS in Focus
This product offers exposure to small-cap dividend-paying emerging market companies. Consumer Discretionary, Information Technology, Industrials, Real Estate, Financials and Materials are the top six sectors of the fund with a double-digit weight each. The fund is heavy on Taiwan (24.39%), followed by China (14.4%) and Thailand (11.5%). The fund charges 63 bps in fees (see all Broad Emerging Market ETFs here).
Why the Move?
Emerging market (EM) ETFs have had a great run lately. Though EMs used to underperform in a rising rate environment, the bloc has become a lot more insulated in recent times. To boost growth, several emerging economies have been resorting to policy easing via interest rate cuts or offering some accommodative measures.
A commodity market rebound and a growing consuming class have also helped the space and the fund lately. Plus, since DGS yields about 3%, it has become a good vehicle for earning a steady current income.
More Gains Ahead?
The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. However, it still can continue with its strength given a positive weighted alpha of 28.00. A positive weighted alpha hints at more gains. As a result, there is definitely still some promise for investors who want to ride on this surging ETF.
The WisdomTree Emerging Mkts Small Cp Div Fd (NYSE:DGS) was unchanged in premarket trading Thursday. Year-to-date, DGS has gained 12.30%, versus a 5.95% rise in the benchmark S&P 500 index during the same period.
DGS currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #7 of 77 ETFs in the Emerging Markets Equities ETFs category.
This article is brought to you courtesy of Zacks Research.
You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
Powered by WPeMatico
