Approximately 140 exchange traded funds offer some exposure to Brazil, Latin America’s largest economy. There are the well-known country-specific options such as the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) and popular diversified emerging markets funds such as the iShares MSCI Emerging Markets ETF (NYSEArca: EEM).
Due to one of the more favorable dividend policies in the developing world, Brazil also occupies premier spots in select emerging markets dividend ETFs, proving that investors can grab some compensation while gaining access to now-rebounding Brazilian equities.
Apparently, index providers and ETF issuers view Brazil’s dividend trajectory in a favorable light because the country is a marquee constituent in some newer emerging markets dividend growth ETFs. For example, the WisdomTree Emerging Markets Dividend Growth Fund (NasdaqGM: DGRE), which debuted last August, features Brazil as its largest country allocation at 15%. [Emerging Markets Dividends are Rising]
DGRE, which sports a distribution yield of almost 1.3%, tracks the WisdomTree Emerging Markets Dividend Growth Index (WTEMDG). That index bases component selection on long-term earnings expectations, return on equity and return on assets, all factors that can provide clues to a company’s ability to maintain and grow payouts, according to WisdomTree research.
The EGShares Emerging Markets Dividend Growth ETF (NYSEArca: EMDG) is a month older than DGRE and features a 15.5% weight to Brazil, making the country the ETF’s third-largest geographic exposure behind China and South Africa.