This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Comparing Small-Cap, Emerging-Market ETFs

The category of emerging-market, small-cap stocks now has two ETFs to compare and contrast.

As the ETF industry creates more innovative products, it's creating access to segments of the market that may not have been easily accessed via index funds in the past, and this is one.

The first to list was the WisdomTree Emerging Markets Small Cap Dividend ETF (DGS) and, in the last few days, the SPDR S&P Emerging Markets Small Cap ETF (EWX) came along.

Below is the back test for each fund compared to the iShares Emerging Market Index ETF (EEM).

1 Year 3 Years 5 Years 10 Years
EWX 15.37% 26.98% 33.14% 11.65%
DGS 17.11% 26.24% 36.77% 21.03%
EEM 21.65% 29.64% 35.95% 12.53%

On first glance, the nod would seem to go to DGS -- but there is one thing that muddies the waters.

The above numbers for DGS include reinvestment of dividends.

The current yield of the index underlying DGS is 5.13%. However it is very unlikely that the actual yield of the fund will be anywhere near 5.13%.

Most of the WisdomTree dividend funds yield less than the indices they track. The easiest way to think of this is if you own 100 shares of Exxon Mobil (XOM - Get Report) on ex-dividend date, but you own 200 shares on the pay date, you get only the dividend for the 100 shares.

As new assets flow into many of the WisdomTree funds, they have metaphorically owned 100 shares on ex-date but 200 shares on pay date, and have to pay the smaller dividend over the larger share quantity.

I don't think this makes WisdomTree funds bad to hold (I use several of them in my practice), but if the dividend of the fund ends up being less than the index, it becomes a much closer call between DGS and EWX.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
EEM $34.39 0.00%
DGS $38.61 0.00%
EWT $13.06 0.00%
EWX $39.25 0.00%
XOM $88.40 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs