Greetings!
Below please find the ETF Spotlight newsletter for
the week of August 2, containing highlights of the research and
data on www.etfresearchcenter.com
as well as a recap of the past week's action in the ETF market. The focus of this week's edition is once again on dividends, but this time with a view out longer term. Feel free to share it with others who may be interested. |
In this week's issue
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 Dividends in the distant future
- Chart of the week: Highest yields five years out
- Fund Focus: WisdomTree Emg. Mkts Small Cap Dividend (DGS)
- Revisions, asset flows & short interest
- DPS estimates, growth rates and yields for major ETFs
- Market monitor - movers & categories
To download the full newsletter click here. |
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Webinar invite
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Reminder: Outlook for the Select Sector SPDRs Webinar
You are invited to attend this quarter's presentation of our investment
outlook for the Select Sector SPDRs, held in cooperation with ALPS Distributors
Inc., distributors for the Select Sector SPDR Trusts. The webinars
typically last 45 minutes, including Q&A.
Attendance is free but registration is required.
What: Investment Outlook for the Sector SPDRs Webinar
When: Tuesday, August 3, 2010
Time: 4:15 pm ET
Cost: None
Registration: Click here.
Reference guide: Sector SPDR Analyzer (PDF)
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| Chart of the week
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Highest yields five years out
Highest yields five years out  |
Investors are starved for yield and rightly so: stocks in the S&P500 (SPY) are only yielding 2.0% and long-dated Treasuries aren't much better.The trouble with simply screening ETFs for the highest dividend yields is that you usually end up with a list dominated by funds with deep structural issues--currently many REITs--where dividends may very well be cut or eliminated. One solution is to look for funds that are cheap now relative to where dividends are likely to be several years from now. We estimated 2015 dividends per share by taking the consensus figures for 2011 and compounding them by the consensus long-term EPS growth estimates (assuming that dividends will keep pace with earnings). We then compared that to the current price to figure the dividend yield that investors would enjoy five years from now even if stock prices go nowhere.The resulting list is not dominated by potential "value traps" (there is only one REIT) but rather by many funds that would not qualify as particularly high yielding investments today. One is the WisdomTree Emerging Markets Small Cap Dividend fund (DGS), a fund we like a lot and the subject of this week's Fund Focus.To download the full newsletter, click here. |
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Fund Focus |
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WisdomTree Emerging Markets Small Cap Dividend (DGS)
While emerging market large cap stocks have become increasingly correlated to our own markets, their small-cap counterparts still offer substantial diversification benefit. Further, the overlooked stocks in DGS offer remarkably consistent profitability--which posted only a modest and short-lived decline during 2008--at bargain valuations. We prefer this fund over the competing SPDR fund (EWX), which is dominated by expensive Tech firms.
To download the full newsletter, click here.
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