ETF Spotlight on the Market Vectors MSCI Emerging Markets Quality Dividend ETF (NYSEArca: QDEM), part of an ongoing series.
Assets: $4.9 million
Objective: The Market Vectors MSCI Emerging Markets Quality fund tries to reflect the performance of the MSCI Emerging Markets High Dividend Yield Index, which is a rules-based index that tracks emerging market companies with above average dividend yields and deemed to be both sustainable and persistent.
Holdings: Top holdings include China Mobile 5.1%, Gazprom 5.1%, Industrial & Commercial Bank of China 5.0%, China Construction Bank Corp 5.0% and Bank of China 3.5%.
What You Should Know:
- Van Eck Global’s Market Vector sponsors the fund.
- QDEM has a 0.5% expense ratio.
- The ETF was launched on January 21, 2014.
- The fund has 175 components, and the top ten make up 38.9% of the overall portfolio.
- Country allocations include China 32.5%, Russia 12.6%, South Africa 12.3%, Taiwan 10.3%, Brazil 8.8%, Malaysia 5.0%, Thailand 4.4%, Poland 3.3%, U.K. 1.6%, South Korea 1.5%, Spain 1.1%, India 1.0%, France 1.0%, Colombia 1.0%, Italy 0.9%, Indonesia 0.7%, Egypt 0.5%, Turkey 0.3%, Bahamas 0.3% and Chile 0.3%.
- Sector allocations include financials 30.7%, energy 25.8%, telecom services 15.6%, materials 9.8%, information technology 6.5%, consumer staples 3.0%, consumer discretionary 3.0%, utilities 2.9% and industrials 2.7%.
- QDEM is down 6.4% since its inception.
- The underlying index has a dividend yield of 4.22%.
- Market Vectors describes the “quality dividend” factor as investments that provide high current income with long-term capital appreciation.
- The underlying components are screened for quality, stable dividend growth and dividend sustainability.
Next page: The latest news
The Latest News:
- Emerging market equities are turning around after China’s export and import growth unexpectedly increased in January, Bloomberg reports.
- “China is the main driver for economic activity, so seeing better data is helping global markets,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., said in the Bloomberg article. “Some of the worries there have dissipated a bit.”
- BlackRock (NYSE: BLK) CEO Laurence D. Fink believes the recent emerging market pullback provides a good buying opportunity, reports Alexis Leondis for Bloomberg.
- “These emerging markets have growing and stronger balance sheets and a faster GDP,” Fink said.
- Emerging market equities are now trading at their biggest valuation discount to developed market stocks since 2006.
Market Vectors MSCI Emerging Markets Quality Dividend ETF
Source: Yahoo! Finance
Financial advisors interested in learning more about investing in the emerging markets through factor-based indices can register for the upcoming webcast, Quality Indexing in International and Emerging Markets, scheduled for Feb. 19.
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.