I was fortunate to somehow stumble upon these Wisdom Tree fundamental indexes, in particular this one. With P/E of 12.8 and a divident yield of 5.2%, among a diversified group of emerging market small caps, it's hard to see how this would not be a long-term homerun...although there could certainly be some major volatility along the way. But as Buffett says, I'd rather have a lumpy 15% than a smooth 12% any day.
I think the rationale for choosing a fundamental-based index is clear. I am curious why anyone here picked this specific ETF among the Wisdom Tree offerings.
I really like the idea of this fund. As stated already we get small cap value in emerging markets, not the same overpriced favorites that all the other EM funds hold. I especially like the high dividends because the problem with small cap emerging market stocks is it is hard to trust their accounting numbers. But if they are handing out cash dividends consistently they must be making good money. The fact that they have good exposure to the shipping sector, which seems very strong, indicates to me that their system does lead them to strong growth companies at value prices. We get all this with very low management fees. The only drawback I see is that I like it so much, indicates that it may already have seen the best part of it's cycle for a while. My best investments, I usually have to hold my nose and jump into something nobody likes.
I like this fund because it is a small cap value emerging market fund. All those characteristics should result in good potential for long term returns.
The expense ration is ok, however could be lower. I am not entirely sure how great it is to use dividend weighting. That should result in vaule orientation which is good generally and especially for small caps though.
I picked this because I am getting emeging markets *meat* with the stocks in this fund. It is not out *chasing* hot ideas like many of the active managers, or tilted toward *hot* stocks that become big in market cap terms. I like that it is not in the overheated markets and mining some gems in places like Taiwan.
Fundamentally it is also a very cheap way to gain exposure to these markets. Even Vanguard wants .50bps to buy and then sell its large cap fund!
In sum I think *small cap value* will outperform in emerging markets as it does in the US, these are unloved stocks that just pay cash via divys.