06/16/2011

Emerging market stocks have been recognized as an important asset class for diversification purpose for a long term retirement investing portfolio. Small company stocks in emerging economies offer even higher growth in this asset class. The small cap shares are usually those which have relatively small market capitalization usually ranging between $ 300 million to $ 2 billion.

It is thus important to study these ETFs more carefully before investing.  In this article, we present more detailed study on WisdomTree Emerging Market ETF (DGS).

The following table lists three most liquid small cap ETFs in this asset class. 

Emerging Market Small Cap

06/10/2011

For information on more ETF performance, please refer to here. 

From the above table clearly DGS is leading the other in terms of longevity and in terms of returns of one year. Compared with broad base emerging market index ETF (DGS), its three year annualized return 11.31% is way above the EEM's annualized return (about 0%). The inception date of the fund is 8/1/2007. 64% of the fund iin small cap shares.

DGS has also a unique diversification in the emerging market. Please see the following table for its holding percentages among countries as of 6/06/2011.

Please also find below the sector wise diversification of DGS as on 06-06-2011.

One of the biggest advantages of investing in small-cap stocks is to exploit market inefficiency: the opportunity to beat institutional investors.Many small cap companies are not well researched. This is more true for emerging market small companies. Since DGS offers a systematic way to invest in a broad basket of small compaines in these regions, it is an effective to gain exposure in this important asset class and derive higher returns.

Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical

Symbols: EEM, DGS, FRN, EWX, VWO, ETFs, Asset Allocation

Exchange Tickers: (EEM), (DGS), (FRN), (EWX), (VWO)

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05/05/2011

Emerging markets operate new environments, with new challenges and unique models for investment. Despite the risk and the toughness, emerging markets have an interesting potential to grow rapidly. Small Cap emerging market funds are going to be the some of the fastest growing but potentially most volatile of the emerging market alternatives.

Emerging Market Small Cap

04/29/2011

Wisdomtree Emerging Mkts Small (DGS) has this time a strong returns, investing the major part of the fund in the Industrial, Financial, and Consumer Discretionary Sector (22%, 28% and 17.5%, respectively). This fund invest mostly in Taiwan, Korea, South Africa and Thailand.

Following, the Guggenheim Frontier Markets ETF (FRN), which 80% of the assets of the fund is invested in American depositary receipts ("ADRs") and global depositary receipts ("GDRs"). The investments are made in what is called “Frontier Markets”, with the participation of developing markets such as Chile, Colombia and Egypt.

Finally, SPDR S&P Emerging Markets Small Cap (EWX) has the lowest figures among the three showed. This fund invest in Emerging Markets included in the S&P Global BMI Index, tracking all the stocks in developed and emerging markets with float-adjusted market capitalization of at least $100 million.

Major Asset Classes Trend

04/29/2011

Analyzing the major assets class trend, it can be seen that the stocks in the Emerging Markets (VWO)have an interesting trend score, taking a strong position in the middle top table, with figures closer to the US Stocks (VTI).

Emerging Markets Small Capitalization represent a good investment for those who do not have problems on risking some money in the short term, and are willing to produce high yields taking into account a smaller period of time.

Symbols: DGS, FRN, EWX, VTI, VWO

Exchange Tickers: (NYSE: DGS), (NYSE: FRN), (NYSE: EWX), (NYSE: VTI), (NYSE: VWO)

Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

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05/05/2011

As the international economy has become more intertwined, many investors have sought out exposure to a wider range of geographic markets. Emerging Market Small Cap ETFs provide investors access to growing companies in the world's growing economies. While emerging market investments come with inherent risks, they also come with more upside potential, as companies in these markets often have more room for growth than firms in more developed nations.

In recent periods, capital inflows to developing economies have increased as investors move away from established economies that have encountered economic difficulty or low growth levels. This reallocation of capital has resulted in strong growth for ETFs that track Emerging Market Small-Cap Equities. Among these ETFs, the Wisdomtree Emerging Markets Small Cap ETF (DGS) has lead the way, returning 27.65% in the past year. Other high level performers include the Guggenheim Frontier Markets (FRN) and the SPDR S&P Emerging Markets Small Cap ETF (EWX), offering investors returns of 15.44% and 11.76% respectively.

Emerging Market Small Cap

4/29/2011

As mentioned, the most successful ETF in the class in the past year has been Wisdomtree's Emerging Markets Small Cap ETF (DGS). This ETF seeks to track the price and yield performance of the Wisdomtree Emerging Markets Small Cap Dividend Index and attempts to invest all of its assets in the stocks that make up the index. DGS is well diversified across numerous sectors. Below are the sectors making up over 10% of the total weighting for the Wisdomtree's Emerging Markets Small Cap ETF (DGS):

• Industrials (19.94%)
• Consumer Cyclical (19.11%)
• Technology (14.36%)
• Financial Services (12.72%)
• Basic Materials (10.43%)

With the continued growth of many emerging economies, a strong argument can be made for investors to have a dedicated portion of their portfolios invested in Emerging Market Small Cap ETFs. While these investments certainly come with risks, the potential reward should be enough to keep most investors on board.

Symbols: DGS, FRN, EWX

Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.

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03/20/2011

Investing for wealth preservation and growth or for retirement purpose is by definition a long term process. In a long term period, experiencing wars, natural disasters and political or social unrests is a fact of life. How to deal with and navigate through these threatening events is pertinent to the success to achieve financial goals. 

As baby boomers are exiting or getting ready to exit the work force, this year suddenly saw many dramatic events unfolding: Japan's earthquake and the still unfolding nuclear power meltdown events, the middle east violence with fear of radical islamic involvement and, this weekend's airstrike by allied forces on the Libyan regime are all pointing to certain tipping points in the world economic and political landscape. The new generations and the baby boomers suddenly find themselves in a world with entangled dangerous events. 

The events certainly made their marks on financial markets: the big swings of the Dow Jones Industrial stocks (DJI) and S&P 500 stocks (SPY) left a dent on the otherwise stubborn euphoric markets. Most risk assets including U.S. stocks (SPY) (VTI), international stocks (EFA) (VEU), emerging market stocks (EEM) (VWO) and REITs (IYR) (VNQ) (RWX) lost ground in the last week. The only standout in the group is commodities (DBC) (GSG). For the week, DBC actually gained 0.78% while gold (GLD) gained 0.11%. For more detailed performance information, please refer to here.