You probably already appreciate the importance of international investing. But chances are, you may be under-allocated in this important asset class. The WisdomTree Global ex-U.S. Dividend Growth Fund may enable you to better capitalize on international dividend growth trends. And our construction process for the WisdomTree Global ex-U.S. Dividend Growth Index (tracked by DNL after costs, fees and expenses) leads to other benefits as well when compared to other international dividend indexes, including:
Return on Equity (ROE): Measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.
Return on assets (ROA): Firm profits (after accounting for all expenses) divided by the firm’s total assets. Higher numbers indicate greater profits relative to the level of assets utilized to generate them.
Leverage: Total assets divided by equity. Higher numbers indicate greater borrowing to finance asset purchases; leverage can tend to make positive performance more positive and negative performance more negative.
Long-Term Earnings Growth Expectations: Compilation of analyst estimates of the growth in operating earnings expected to occur over the next full business cycle, typically 3 to 5 years, sourced from Bloomberg.
Earnings Retention: Proportion of a firm's earnings that are is not paid out to shareholders in the form of a dividend but rather reinvested back into the business. Higher numbers indicate a greater percentage of earnings are being reinvested.
Emerging markets have been underperforming for the past few years, leading some investors to consider changing allocations. But, if we follow traditional investment wisdom, the time to buy is when prices are down. And, given that emerging markets are still expected to drive future global growth over the long term8, cutting allocations altogether may not make sense. Consider that:
+The economic growth potential of emerging market companies is driven largely by favorable demographic trends9
+EM equities10 may offer relative value when compared to U.S. equities11
The WisdomTree Emerging Markets Dividend Growth Index (tracked by DGRE after costs, fees and expenses) uses a forward-looking approach to help you capture the equity performance and dividend growth potential of the emerging markets.
8Source: International Monetary Fund (IMF) World Economic Outlook, October 2013.
9Source: International Monetary Fund (IMF) World Economic Outlook, October 2013.
10Represented by the MSCI Emerging Markets Index.
11Represented by the S&P 500 Index.
Dividend-paying equities are an attractive option for investors looking to generate income, pursue higher total return potential—and more. Consider the following:
Learn more about WisdomTree U.S. Dividend Growth Fund (DGRW) »
Learn more about WisdomTree U.S. SmallCap Dividend Growth Fund (DGRS) »
Learn more about WisdomTree Emerging Markets Dividend Growth Fund (DGRE) »
Learn more about WisdomTree Global ex-U.S. Dividend Growth Fund (DNL) »
1Source: Professor Robert Shiller, Yale University, 2013. Universe is the S&P 500 Index from 12/31/1957 to 12/31/2013.
2Sources: WisdomTree, Bloomberg. Universes include the NASDAQ U.S. Dividend Achievers Select Index, Dow Jones U.S.
Select Dividend Index, and S&P High Yield Dividend Aristocrats Index. Period is from 12/31/2012 to 12/31/2013.
Apple is now the second largest dividend payer in the United States.3 But popular dividend indexes such as the NASDAQ US Dividend Achievers Select Index won't be able to include Apple until as late as 2023. In fact, because of its strict historical growth requirements, this index currently excludes many of today’s 20 largest dividend payers4. A primary motivation for the creation of the methodology underlying the WisdomTree U.S. Dividend Growth Index, the Index which DGRW is designed to track, was an attempt to provide an alternative approach focusing on dividend growth—an approach that didn’t necessarily rely solely on a backward-looking screen. As a result, Apple and many other dividend leadersare already eligible for inclusion in the WisdomTree U.S. Dividend Growth Index, which DGRW5 is designed to track after costs, fees and expenses.
3Based on Apple's indicated dividend per share multiplied by its shares outstanding as of 12/31/2013. Source: Bloomberg.
4Twenty largest dividend payers is based on the cash Dividend Streams® of companies in the WisdomTree Dividend Index as of 12/31/2013.
5As of the screening date for initial constituents, 3/31/2013, Apple's weight within the WisdomTree U.S. Dividend Growth Index was 4.87%.
We believe small companies have big potential. Not only have they outperformed their larger counterparts over long periods6, but they have historically lead the way out of recessions. Their ability to adapt and innovate helps them create the products, services and business methods we will come to rely on in the future. DGRS, the WisdomTree U.S. SmallCap Dividend Growth Fund, helps investors gain exposure to the small companies that are well positioned to grow their dividends the fastest. Consider that:
6Source: Fama & French Data Library for period June 30, 1926 to December 31, 2013.
7Refers to the WisdomTree Dividend Index constituents having a record high Dividend Stream® as of the 11/30/2013 rebalance screening. Dividend Stream® is equal to the sum of all constituents’ indicated dividend per share times their number of shares outstanding.