Among the bushels of new ETFs that have been listed on the U.S. market lately are 10 foreign-sector ETFs from WisdomTree. The sector funds weight their holdings in a similar manner as WisdomTree's other funds, keying off of dividends. These are unique, in that they own no domestic stocks, unlike some putatively foreign-focused funds. They have been in the works for a while, and I believe they could be useful to investors.Out of the gate, the one that looks most interesting to me is a telecom fund called the WisdomTree International Communications Index Fund (DGG). The telecom sector is a good way to add foreign exposure to a portfolio because every country has a phone company (usually they are among the biggest), and they often pay a healthy dividend.
|Fund||One year*||Three-year annualized||Five-year annualized|
|iShares DJ Telecom||17%||16%||-0.63%|
|iShares S&P Global Telecom||14%||14.9%||NA|
|WisdomTree Intl Communications||13.4%||16.22%||11.61%|
|*September 30, 2006
Clearly the fund holds its own. The case for owning this fund would be to complement other stocks or funds in the sector. I don't see it as a stand-alone proxy for telecom.