Emerging Market Dividend ETFs: How to Choose the Right Fund | ETF Trends

Emerging market dividend ETFs have the twin benefits of higher yields and exposure to safer, more established companies in notoriously volatile developing markets.

“The emerging-markets story is all about growth, the red-hot kind. Paradoxically, the best way to benefit from economic growth may be to hold boring, dividend-paying stocks,” Morningstar analyst Samuel Lee writes in the firm’s September ETF newsletter.

Investing in emerging markets can be risky due to less regulation, fewer shareholder protections and inefficient management.

“Holding dividend-payers is one of the few ways individual investors can mitigate these issues,” Lee said.

Emerging market dividend ETFs include WisdomTree Emerging Markets Equity Income (NYSEArca: DEM), SPDR S&P Emerging Markets Dividend (NYSEArca: EDIV), EGShares Low Volatility Emerging Markets Dividend ETF (NYSEArca: HILO) and iShares Emerging Markets Dividend Fund (NYSEArca: DVYE).

“There are plenty of good options out there,” Morningstar’s Lee wrote.