I wondered people’s opinions about two ETFS, I am thinking about. WisdomTree Japan SmallCap Dividend ETF (DFJ) and WisdomTree Emerging Markets High Div ETF (DEM). Dem has a p/e of 6, and djf has a p/e of under 10. If you add the expected earnings growth of the companies, to the dividend yield, you get 17% for both ETFs. They seems like solid picks for me. Thoughts?


Random thoughts

I would believe the dividend yield very much more than I would believe the growth rate expectations.
Check out the underlying growth rates of the businesses…they are likely to be disappointing.
As a quick guess, don’t expect growth faster than inflation.
So, the question might be whether you consider the investment the success if you get no more than the dividend yield, inflation adjusted.

I’m not a fan of ETFs in general, but it’s admittedly hard to buy individual stocks in a variety of jurisdictions.
And I’m not a fan of dividends in general, but it’s a good thing to look for when investing outside the world’s best markets:
corporate governance is not, as a rule, aimed at treating small shareholders fairly or richly.
(this complaint applies to not just frontier markets, but also Korea, France, and Japan)
A stock having a decent dividend is usually a side effect of the controlling group needing the income, but you do get to coattail that way, so it’s a good idea.
You should expect a lot of the profits of the firms not to benefit you, but at least you’ll get a piece.

So, despite my biases, maybe an international dividend fund is not such a terrible idea.
The US dollar is very strong at the moment, and typical US valuation levels are very high, so the timing isn’t so bad.

Still…it’s sometimes a decision between paying richly for good companies or getting bad ones cheaply.
The best businesses won’t in general be found in those funds.



I bought ISVL. p/e 9.13, dividend yield 4.52%, long term earnings growth 8.89%

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ISVL is really thinly traded, 654 shares so far today

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