Bogleheads

baw703916 · Joined: 01 Apr 2007 Posts: 2353 Location: Northern Virginia

Today, for the first time, the Fund Assets Under Management page on Wisdomtree's site lists the WisdomTree Emerging Markets SmallCap Dividend Fund (DGS) . In the past, WisdomTree has listed new ETFs on that page about a week before they begin trading. The link on the details of the fund doesn't currently work, and the company hasn't yet made an announcement of when the fund begins trading. Nor do we know what the E/R will be; the WT EM dividend fund is 0.63%

So for those people w/o DFA access who like the idea of three Fama/French factors in one fund, you soon will have a way to achieve it: beta, size, and (kind of) value.

Probably only advisable for tax-advantaged accounts though? (high % of unqualified dividends, and high turnover).

Best wishes,
Brad

Kenster1 · Joined: 28 Feb 2007 Posts: 2728

Here's the link to info on the WisdomTree Emerging Market Smallcap Dividend Index.

http://www.wisdomtreeindexes.c....indexid=82

Like you said, the ETF should be out shortly.

Top 10 Countries as of 10/24/2007

Taiwan............. 23.61%
South Africa..... 13.86%
Korea.............. 12.05%
Thailand.......... 11.26%
Malaysia.......... 10.87%
Israel................. 9.07%
Turkey............... 4.20%
Mexico............... 2.85%
Chile.................. 2.63%
Indonesia.......... 2.62%
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rickster52fl · Posted: Thu Oct 25, 2007 9:43 pm Post subject:

Interesting...FTSE recently decided to move Israel out of the 'emerging markets' category and starting in 2008 will include it in its developed markets indices:

http://www.marketwatch.com/new....EC040FD%7D

stratton · Joined: 04 Mar 2007 Posts: 7897 Location: Puget Sound

Nice! I didn't even know about this. I'm hoping the iShares one shows up soon, but this will work too. 4.54% dividend so not suitable for taxable.

Paul

chipmunk · Joined: 13 Jun 2007 Posts: 216 Location: Washington DC

Outstanding! Thanks, Brad.

I'm still holding T.Rowe Price International Discovery (PRIDX), which is a combination developed + emerging small/mid-cap international fund, with some micro-cap as well (all the bases covered in one fund). So far YTD, it has so far outperformed WisdomTree International Small-Cap Dividend (DLS), which is fortunate for me, and I'm quite impressed with T.Rowe Price's international management. Yes I'm a Fama-French fan, but I'm not yet comfortable with WisdomTree's custom-designed index based mainly on what appears to be backtesting analyses, so I will just watch for a while.

Dan
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Kenster1 · Joined: 28 Feb 2007 Posts: 2728

WisdomTree Emerging Markets Smallcap Dividend Index FactSheet:

http://www.wisdomtree.com/libr....ex-259.pdf

=====

WisdomTree Emerging Markets Indexes: An Introduction

http://www.wisdomtree.com/libr....arkets.pdf
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SURGEON GENERAL'S WARNING: Any overconfidence in your ability, willingness and need to take risk may be hazardous to your health.

Valuethinker · Joined: 11 May 2007 Posts: 12881

baw703916 · Joined: 01 Apr 2007 Posts: 2353 Location: Northern Virginia

I just noticed something else...I don't see any BRIC in the top ten list. It might be a useful diversifier to VEIEX/VWO on that basis alone.

Brad

Vegomatic · Joined: 28 Feb 2007 Posts: 134

Looks like WT prices International Small Cap @ 10 bps over...

international large cap. Soooo..., with E/M at 63 bps, would that mean E/M small cap at 73 bps? Confused

Helot · Joined: 03 Mar 2007 Posts: 121

chipmunk · Joined: 13 Jun 2007 Posts: 216 Location: Washington DC

63 bps is actually a real bargain. My T.Rowe Price Int'l Discovery (PRIDX) is 124 bps. Even that is cheap compared to my old and overpriced 401(k) plan's (I'm now self-employed with a SEP-IRA) int'l small-cap fund, which was a whopping 146 bps (they actually tried to talk me into keeping my money with them, yikes, and not rolling it over to Vanguard, which is what I did). Shocked

I believe the average for this asset class is somewhere around 150 bps. If we had more options in the marketplace, I'm sure the average ER would magically fall, but we just don't have much competition. I'm keeping my eye on DGS, but, so far, its sister fund, DLS, has not been that impressive, IMHO (yes, you really do need to consider performance and not just ER Wink

).

Dan
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MossySF · Joined: 19 Apr 2007 Posts: 908

chipmunk · Joined: 13 Jun 2007 Posts: 216 Location: Washington DC

baw703916 · Joined: 01 Apr 2007 Posts: 2353 Location: Northern Virginia

I agree with you, Mossy.

Returns of various ISC funds since since the beginning of the year:

chart

chipmunk · Joined: 13 Jun 2007 Posts: 216 Location: Washington DC

stratton · Joined: 04 Mar 2007 Posts: 7897 Location: Puget Sound

baw703916 · Joined: 01 Apr 2007 Posts: 2353 Location: Northern Virginia

Apparently, DGS began trading today:

http://www.wisdomtree.com/etfs....p?etfid=53

The expense ratio is 0.63%, the same as WT's large-cap EM fund. I think that's a pretty good rate, considering it's EM, small, and value all in one (and EEM has an E/R of 0.70).

Right as I write this it's trading at less than NAV. Better hurry!

Well, maybe not. Wink

It's great to have a new vehicle that opens up a new asset class, but remember to think about how it will fit in to your overall strategy.

Best wishes,
Brad

indexfundfan · Joined: 20 Feb 2007 Posts: 769

The spread is consistently 5 cents or less. Volume so far (after about 2 hours) is only 9100 shares.
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SmallHi · Joined: 21 Feb 2007 Posts: 1711

I don't think EM Small companies play a major role in anyone's portfolio--or even a minor role for that matter. And that includes investors with access to Dimensional Funds.

From what I can tell, there is a big contingent of advisors that don't even include EM Markets. Those that do use either VWO, DFA EM Large, DFA EM Core, or DFA EM Value.

VWO is the choice for advisors who believe expense ratios are all that matter.

DFA EM Large is the choice for advisors looking for a straight forward, broadly diversified EM portfolio with relatively low costs -- but prefer the equal weighted structure of individual countries.

DFA EM Core is probably the most popular -- based on asset growth (almost $2B in 2 years) -- and the most universal for those looking for a meaningful small/value tilt but not wanting to "bet the farm" on it, and not wanting to dice 5 to 10% of a portfolio 2 or 3 different ways. DFA EM Core is also attractive because it is much more diversified than traditional EM Indexes. It has more securities held in the SV "bucket" of its portfolio than VWO has in its entire fund! Furthermore, I believe DFA EM Core also has more holdings than the Vanguard US Total Market Index -- and it adopts a modified country equal weighted approach

DFA EM Value is for investors who want maximum value exposure with a moderate size tilt (the portfolio invests in stocks marketwide). For those that think EM is already pretty risky and volatile, and the added risk of value on an absolute basis isn't tremendous compared to the already considerable relative volatility of the asset class (SD of 33 -- double that of the S&P 500)

Bottom line, I am just not sure how much benefit for most investors there is splitting EM exposure into VWO and EM Small Cap. Going back to 1989, adding EM Small to an EM Large Portfolio that is dominated by US and Int'l stocks added maybe 0.15%. As I have mentioned more than once, small changes in historical returns or standard deviations are not a great reason to make portfolio changes...

SH