Introduction

The WisdomTree Emerging Markets SmallCap Dividend Fund (DGS, $49.39) is one of the first three international small-cap ETFs mentioned in this article. DGS is designed to give investors access to small-cap stocks that pay dividends and are part of the WisdomTree Emerging Markets SmallCap Dividend Index.

This index includes companies that are in the lower 10% of the total market cap of the larger WisdomTree Emerging Markets Dividend Index. The companies in this index are assigned weights based on the dividends they pay annually.

To be included in the index, companies must have a minimum market cap of $200 million and a median daily dollar volume of $200,000 for six months before screening. Also, no single country or sector should make up more than 25% of the portfolio. The index is updated annually in October.

Currently, DGS holds 973 positions. The top three countries by weight are Taiwan (26.6%), South Korea (12.3%), and India (9.6%). The three largest sectors are technology (18.7%), financials (14.5%), and industrials (13.9%).

The top 10 holdings make up only 8% of the total assets, with the largest position being Taiwanese electronic parts maker Chicony Electronics at 1.1%. The fund has a turnover rate of 53% over the past year.

Small-cap stocks make up about 56% of the fund, with an average market cap of $1.5 billion. The fund also has low P/E and P/S ratios of 9.2 and 1.0, respectively. Additionally, the WisdomTree Emerging Markets SmallCap Dividend Fund offers a dividend yield above the market average at 4.5%.

A $10,000 investment in DGS three years ago would now be valued at $15,400.