The ALPS Emerging Sector Dividend Dogs ETF (EDOG) outperformed broader global equities markets last week.
The U.S. dollar’s weakening amid optimism around China’s less restrictive COVID-19 measures has been supportive for EDOG. Additionally, a number of EDOG’s holdings had positive news stories last week that drove performance, SS&C ALPS Advisors wrote in a December 12 ETF Spotlight.
Within EDOG’s Communication Services sector, cellular network provider Vodacom Group Ltd (VOD SJ, 1.94% weight as of December 9) rallied 4.77% last week on the back of a potential acquisition from Abu Dhabi-based Emirates Telecom Group. The deal would bring synergies from Vodacom’s African footprint that could benefit both communications providers, according to ALPS.
Additionally, Philippines-based digital services provider PLDT Inc. (TEL PM, 2.11% weight as of December 9) gained nearly 8% last week on a follow-through rally from its recent earnings beat, where the company cited strong growth within its datacenters and broadband buildout in the Philippines, ALPS wrote.
EDOG’s overweight to cyclical sectors — energy and materials — outperformed last week with South African mining company, African Rainbow Minerals Ltd. (ARI SJ, 2.19% weight as of December 9), gaining nearly 6% after consumer confidence in South Africa posted a strong recovery along with a rise in employment growth, driving the South African Rand higher, according to ALPS.
South African energy producer Exxaro Resources Ltd. (EXX SJ, 1.91% weight as of December 9) increased full-year revenue guidance on a rise in coal sales volumes and expectation of coal production to increase 3% for the year, sending its stock 3.57% higher last week.
Momentum continued last week for EDOG’s China-based stocks, which comprise nearly 10% of the fund as of December 9. News of China’s potential reopening and the discontinuation of COVID-19 testing in public venues extended China-based stocks month-long rally.
Catalyzed last week by the potential jump in China’s manufacturing and economic activity from its less restrictive COVID-19 policies, Zoomlion Heavy Industry Co. (1157 HK, 2.28% weight as of December 9), a construction equipment manufacturer, rose 8.98%. During the same period, Legend Holdings Corp. (3396 HK, 1.97% weight as of December 9), an IT developer for Chinese financial firms, and China Railway Signal (3969 HK, 2.09% weight as of December 9), a railroad systems manufacturer, both gained 7.54% and 4.85%, respectively, according to ALPS.
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