EMDG tracks a FTSE index, which is relevant because that index provider does not classify South Korea as an emerging market and EMDG’s underlying index also excludes Taiwan. The result is an ETF where China, South Africa and Brazil combine for over 55% of the country weight.
Although EMDG is less than a year old, the ETF has its high points. For example, an index dividend yield of 3.87% is attractive as is a trailing P/E below 10. None of the ETF’s holdings receives a weight of more than 3%.
The WisdomTree Emerging Markets Dividend Growth Fund (NasdaqGM: DGRE) debuted a month after EMDG. Like DEM, DGRE is overweight Russia (12.5% in the new ETF) relative to the MSCI Emerging Markets Index. Other double-digit country allocations in DGRE include Brazil, South Africa, Indonesia and Thailand. [New Dividend ETFs With Staying Power]
DGRE is similar to the domestically-focused WisdomTree U.S. Dividend Growth Fund (NasdaqGM: DGRW) in that both screen for dividend growth candidates using a combination of growth and value factors. DGRE’s underlying index, the WisdomTree Emerging Markets Dividend Growth Index, was established in late June 2013. The ETF is up 6.3% in the past month.
The newest entrant to emerging markets dividend ETF fray is the Market Vectors MSCI Emerging Markets Quality Dividend ETF (NYSEArca: QDEM), which debuted in late January. QDEM tracks the MSCI Emerging Markets High Dividend Yield Index, which is home to companies “that have demonstrated dividend yields that are higher than average and deemed by the Index Provider, MSCI, to be both sustainable and persistent,” according to Market Vectors.
China, South Africa and Russia combine for almost 58% of QDEM’s weight. Not only are China and Russia two of the least expensive emerging markets on valuation, but the two countries are also two of the biggest dividend payers in the developing world. [Market Vectors Makes Quality ETF Push]
QDEM charges 0.5% per year and has thus far attracted $4.9 million in assets.
iShares Emerging Markets Dividend ETF
Tom Lydon’s clients own shares of EEM and DEM.