Under The Hood: A Dividend ETF With A Catchy Slogan

Head over to the WisdomTree Web site and you'll quickly learn that today's “Under The Hood” candidate is “The first emerging markets dividend ETF.” Their words, not ours. The WisdomTree Emerging Markets Equity Income Fund

very well could be the first EM dividend fund as it made its debut in July 2007. Fast-forward to 2011 and there are no shortage of ETFs that marry the potent concept of dividends and emerging markets through both large- and small-cap stocks, but if DEM really was the first, at the very least it is worth examining to see if the ETF is still relevant in today's market environment. Simply put, yes it is. We've previously noted in this space that foreign dividend payers usually trump their U.S. counterparts in terms of both yield and the actual payout in dollar terms, making global dividend stocks a must-have for any income investor. From there, the question becomes: Does DEM merit an expense ratio of 0.63%, which is far higher than most of the well-known dividend ETFs that focus on U.S. large-caps? Again, the answer is yes. DEM is up 27% in the past year. That's 10% better the iShares Dow Jones Select Dividend Index Fund

and the Vanguard Dividend Appreciation ETF

. Go on down the line of ETFs like DVY and VIG and you'll see that DEM outperforms the group. DEM basically revolves around four sectors, telecom, financials, materials and information technology. Combined, they account for two-thirds of the ETFs weight. At the country level, Taiwan and Brazil combine for 37% of DEM's weight with no other country getting a double-digit weight, though 19 countries in total get some exposure in the ETF. The ETF holds over 260 stocks, but the largest weight goes to Taiwan Semiconductor

at just 4.4%. With almost $1.5 billion in assets under management, it's obvious DEM has cemented itself as one of the pillars of EM dividend ETFs and hey, it makes for a nice complement to U.S. dividend payers within a portfolio.