Qualifying Quality in Emerging Markets

Bolstering the case for quality investing, those other metrics include high returns on equity, stable dividend growth, robust cash flow, lack of financial leverage, sturdy balance sheets and strong management, notes MSCI.

On the dividend front, the MSCI Emerging Markets (EM) Quality Mix Index features a yield of almost 3.1%, largely the result of a combined 32.5% weight to China and Taiwan. China is the largest emerging markets dividend payers while Taiwan has one of the most favorable dividend policies in the developing world. [China’s Dividend Growth Story]

QEMM will compete with two Market Vectors ETFs that also adhere to MSCI quality indices: The Market Vectors MSCI Emerging Markets Quality ETF (NYSEArca: QEM) and the Market Vectors MSCI Emerging Markets Quality Dividend ETF (NYSEArca: QDEM).

Those ETFs have almost $11 million in combined assets under management and have returned an average of 8.8% since their January debuts. [Quality EM Dividends in One ETF]

ETF Trends editorial team contributed to this post.