Monday, July 30, 2007
Over the weekend I remembered that WisdomTree just listed a dividend weighted emerging market fund, ticker DEM.
This chart compares DEM with the other broad-based emerging market funds, at least the ones I could think of.
WisdomTree says that the dividend weighting should hold up better during declines and while I have not checked all of their funds DEM seems to be passing its first little stress test.
Granted the fund is only ten minutes old and this may not mean anything for the future but the fund is making a good impression out of the blocks which is all a new fund can do.
Barron's had an article over the weekend that opined that after years of great returns some sort of serious correction or reversion to the mean would be coming. I am a huge believer in emerging markets investing but people need to realize that when things do turn there is usually pain involved. A little over a year ago I trimmed an overweight position closer to an equal weight (equalweight being high single digits) and more recently cut back on China to get back to equalweight again.
After a great run I have a tough time thinking overweight is the right allocation but zero weight is a bad idea too as they obviously could keep this run going for years. Clearly though there is no blood in the streets.