DGRE: A Quality EM Fund Without China Exposure, Dividend Focus
Emerging Markets have been a source of disappointment for global investors since their peak in Q4 2007. Despite intermittent short-term outperformance and hopes for a rebound, relative strength against the US has declined since October 2010. However, amidst that awful trend, EM small caps have quietly emerged as winners, showing a total return of nearly 10% since mid-July 2023 and a solid 19% over the past year, outpacing domestic small caps.
The WisdomTree Emerging Markets Quality Dividend Growth Fund ETF (DGRE) stands out among EM-focused strategies. Notably, DGRE gained attention for its move away from the troubled Chinese stock market last year, resulting in significant alpha versus other broad EM index funds. Over the past 12 months, DGRE has outperformed the iShares MSCI Emerging Markets ETF (EEM) by over 11 percentage points. This outperformance is attributed to DGRE's investment strategy, which focuses on dividend-paying companies with growth characteristics across emerging markets.
Techically, DGRE continues to pace EEM, with a total return of only -10% in the last two years compared to EEM's 19% decline. My featured chart illustrates that DGRE is near the top end of a trading range that began about a year ago, but with some support under the current price. DGRE's rising 200-day moving average suggests the bulls are in charge, and that assertion is supported by a positive RSI momentum reading. Looking ahead, I see potential for DGRE to rally toward the $28 to $29 range, given the historical battleground from 2021 and early 2022, while support is seen around $21 to $21.50.
Big picture, DGRE provides investors with exposure to Emerging Markets but without the risk associated with China. The strategy focuses on high-quality companies with a history of increasing dividends, making it an attractive option for those seeking EM investments with a proven track record. The chart suggests a bullish trend is emerging, and DGRE's unique approach sets it apart from other EM index funds.
Disclosure: I am a freelance writer for WisdomTree Investments
The WisdomTree Emerging Markets Quality Dividend Growth Fund ETF (DGRE) stands out among EM-focused strategies. Notably, DGRE gained attention for its move away from the troubled Chinese stock market last year, resulting in significant alpha versus other broad EM index funds. Over the past 12 months, DGRE has outperformed the iShares MSCI Emerging Markets ETF (EEM) by over 11 percentage points. This outperformance is attributed to DGRE's investment strategy, which focuses on dividend-paying companies with growth characteristics across emerging markets.
Techically, DGRE continues to pace EEM, with a total return of only -10% in the last two years compared to EEM's 19% decline. My featured chart illustrates that DGRE is near the top end of a trading range that began about a year ago, but with some support under the current price. DGRE's rising 200-day moving average suggests the bulls are in charge, and that assertion is supported by a positive RSI momentum reading. Looking ahead, I see potential for DGRE to rally toward the $28 to $29 range, given the historical battleground from 2021 and early 2022, while support is seen around $21 to $21.50.
Big picture, DGRE provides investors with exposure to Emerging Markets but without the risk associated with China. The strategy focuses on high-quality companies with a history of increasing dividends, making it an attractive option for those seeking EM investments with a proven track record. The chart suggests a bullish trend is emerging, and DGRE's unique approach sets it apart from other EM index funds.
Disclosure: I am a freelance writer for WisdomTree Investments