WisdomTree Trust WisdomTree Emerging Markets Quality Dividend Growth Fund (DGRE) seeks to track the WisdomTree Emerging Markets Quality Dividend Growth Index, which selects dividend-paying companies from emerging markets that demonstrate both quality characteristics and dividend growth potential. This income-focused ETF targets stocks from developing countries including China, India, Taiwan, and Brazil.
How It Works
DGRE uses a fundamentally-weighted approach that screens emerging market companies for quality metrics like return on equity and return on assets, then further filters for consistent dividend growth over three years. Selected stocks are weighted by their annual cash dividends paid rather than market capitalization, giving higher allocations to companies paying larger dividends. The fund rebalances annually in December and holds approximately 300-400 emerging market dividend-paying stocks across various sectors.
Key Features
- Combines quality screening with dividend growth requirements, filtering out dividend traps common in emerging markets
- Dividend-weighted methodology provides higher exposure to companies with sustainable, growing dividend payments rather than just high yields
- Covers major emerging markets including China, India, Taiwan, South Korea, and Brazil with currency exposure unhedged
Risks
- This ETF can lose significant value during emerging market selloffs, potentially declining 40-50% during crisis periods like 2008 or 2015
- Currency fluctuations can amplify losses when emerging market currencies weaken against the U.S. dollar during global uncertainty
- Dividend cuts during economic downturns can trigger forced selling as companies no longer meet the fund's dividend growth criteria
Who Should Own This
Best suited as a satellite holding (5-15% of total portfolio) for income-focused investors with high risk tolerance and 7+ year time horizons seeking emerging market dividend exposure. Requires patience for volatility and currency swings. Works well for investors wanting international diversification beyond developed markets in retirement or taxable accounts.