WisdomTree launches small-cap Emerging Markets dividend-paying ETF

WisdomTree announced the launch of a new small-cap emerging markets dividend-paying ETF yesterday, which started trading on NYSE Arca today with ticker DGS (NYSEArca: DGS). This ETF is based on WisdomTree's Emerging Markets SmallCap Dividend Index, which, according to their calculation has beaten the MSCI Emerging Markets Index by by about 9%, when backdated for the last 10 years.

Key index facts:

• Top 10 countries based on weightage include (guess what, no BRICs in the top 10):
• Taiwan
• South Africa
• Korea
• Thailand
• Malaysia
• Israel
• Turkey
• Mexico
• Indonesia
• Chile
• The maximum weight assigned to the topmost holding is just 2.68% - which means that the fund is highly diversified, which is good, since this is a risky play.
• Dividend yield: 4.39%
• Companies included in the Index fall within the bottom 10% of total market capitalization of the WisdomTree Emerging Markets Dividend Index as of the annual index measurement date
• IBD reports that the index includes some 369 odd dividend paying stocks across 17 different countries
  

Key fund facts:

• The fund, being an ETF, obviously tries to track the above-mentioned index
• NAV as of 10/30/07: $51.50
• Price: $51.40
  
• Expense Ratio: 0.63%

This fund is probably what some high-risk investors were looking for anyway. Since the index includes only dividend-paying companies, it offers a cushion against the volatility of the emerging markets small-caps. Also the fact that an ETF by very nature is highly diversified, the risk is further reduced.

To know more about ETFs, click here and here.

Voluntary Disclosure: I currently own WisdomTree shares.