Stocks enjoyed another week in green territory as upbeat economic data and no new tapering hints from the Fed gave investors few reasons to cut off winning positions. The product development front was quite active considering the fairly muted trading week on Wall Street; new additions to the ETF universe include the Nashville Area ETF, marking the first ever city-focused product launch, as well as the innovative Risk-Weighted ETF from VelocityShares, which looks to offer a twist on traditional cap-weighted and low volatility strategies [see also The Complete Visual History Of SPY].
DGRE: Where Growth & Value Investing Meet
This new ETF offers a compelling twist on an age old strategy; DGRE provides exposure to dividend-paying stocks in emerging markets that also exhibit growth characteristics, allowing for investors to enjoy both a stream of current income as well as the potential for attractive capital appreciation. This ETF is uniquely positioned to take advantage of developing economies by focusing on stocks that offer the stability associated with dividend-paying securities while at the same time boasting growth characteristics that appeal to those in it for the long-haul [see 101 High Yielding ETFs For Every Dividend Investor].
Unlike most dividend ETFs out there that focus either on consistency of payouts or yield, DGRE actually targets the companies with high dividend-growth potential; this ETF essentially allows investors to favorably position themselves in anticipation of rising dividends as well as capital appreciation in the emerging markets asset class. From a portfolio composition perspective, DGRE avoids some of the biases that most Emerging Markets ETFs are prone to. Most notably, this ETF is not tilted towards the BRIC countries, instead it has more meaningful allocations in companies from Mexico, Indonesia, and Thailand.
Meet The Competition
DGRE will face some stiff competition from more established funds in the emerging markets space, including:
- Vanguard FTSE Emerging Markets ETF (VWO, A) with $50 billion in AUM
- iShares MSCI Emerging Markets Index Fund (EEM, A-) with over $35 billion in AUM
The new WisdomTree ETF charges 0.63% in annual expense fees and warrants a closer look from anyone wanting to add emerging markets exposure to their portfolio’s equity component; investors who pick this ETF don’t have to decide between a value- or growth-oriented strategy because it strives to bundle the best of both worlds in one ticker.
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Disclosure: No positions at time of writing