Daily ETF Watch: WisdomTree Debuts 2 Funds

New dividend-focused ETFs provide exposure to emerging and developed markets.

Reviewed by: Heather Bell
Edited by: Heather Bell

Today WisdomTree rolled out two ETFs that, like many of its products, target dividends. The WisdomTree Emerging Markets Dividend Fund (DVEM) uses the dividend-weighted approach that the firm is famous for, while the WisdomTree International Quality Dividend Growth Fund (IQDG) has a more complex methodology, though one still rooted in dividend weighting.

DVEM comes with an expense ratio of 0.32%, and IQDG comes with an expense ratio of 0.38%.

The emerging market fund’s index selects its components from a universe of 17 emerging market countries, screening out companies with less than $200 million in market capitalization. Components must also pay out at least $5 million in cash dividends annually and meet liquidity and volume requirements.

DVEM’s holdings are weighted by their dividends, but individual sectors and countries are capped at 25% during rebalancings, according to its prospectus.

IQDG targets developed markets outside of North America. Its index is similarly weighted by dividends and caps the weights of individual sectors and countries at 20%. However, IQDG has extra layers to its methodology that DVEM doesn’t have.

IQDG’s index includes roughly 300 dividend-paying companies that are ranked and selected based on quality and growth factors. In addition to meeting certain liquidity and volume requirements, eligible companies must pay out at least $5 million in cash dividends annually and have a market capitalization of at least $1 billion, the prospectus said. An added wrinkle for eligibility is that companies’ earning yields must be greater than their dividend yields.

Both funds launched on Bats, which owns ETF.com.

Direxion Rolls Out 1X Bear Funds

Direxion has launched three ETFs offering inverse exposure to key sectors. Each one aims to provide -100% of the performance of its underlying index and comes with an expense ratio of 0.45%. The funds are as follows:

  • Direxion Daily Energy Bear 1X Shares (ERYY)
  • Direxion Daily Financial Bear 1X Shares (FAZZ)
  • Direxion Daily Technology Bear 1X Shares (TECZ)

The funds are tied to the same indexes that underlie the multibillion-dollar Select Sector SPDRs, meaning that they complement the Energy Select Sector SPDR (XLE | A-91), the Financial Select Sector SPDR (XLF | A-92) and the Technology Select Sector SPDR (XLK | A-94).

The funds launched on the NYSE Arca.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.