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Is SPDR SP Emerging Markets Dividend ETF (EDIV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the SPDR SP Emerging Markets Dividend ETF (EDIV - Free Report) is a smart beta exchange traded fund launched on 02/23/2011.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $287.93 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. EDIV, before fees and expenses, seeks to match the performance of the S&P Emerging Markets Dividend Opportunities Index.
This Index generally includes 100 tradable, exchange-listed common stocks from emerging market countries that offer high dividend yields. Additionally, stocks must have positive 3-year earnings growth and profitability. Stocks are weighted by annual dividend yield. To ensure diverse exposure, no single country or sector has more than a 25% weight and no single stock has more than a 3% weight.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.88%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Taiwan Semiconductor Manufacturing Co. Ltd. (2330-TW) accounts for about 4.20% of the fund's total assets, followed by China Resources Land Limited (1109-HK) and Hengan International Group Co. Ltd. (1044-HK).
Its top 10 holdings account for approximately 33.79% of EDIV's total assets under management.
Performance and Risk
Year-to-date, the SPDR SP Emerging Markets Dividend ETF has lost about -17.33% so far, and is down about -17.12% over the last 12 months (as of 07/23/2020). EDIV has traded between $19.98 and $32.77 in this past 52-week period.
The ETF has a beta of 0.88 and standard deviation of 22.96% for the trailing three-year period, making it a medium risk choice in the space. With about 124 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR SP Emerging Markets Dividend ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $53.22 billion in assets, Vanguard FTSE Emerging Markets ETF has $60.85 billion. IEMG has an expense ratio of 0.13% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SPDR SP Emerging Markets Dividend ETF (EDIV) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the SPDR SP Emerging Markets Dividend ETF (EDIV - Free Report) is a smart beta exchange traded fund launched on 02/23/2011.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is sponsored by State Street Global Advisors. It has amassed assets over $287.93 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. EDIV, before fees and expenses, seeks to match the performance of the S&P Emerging Markets Dividend Opportunities Index.
This Index generally includes 100 tradable, exchange-listed common stocks from emerging market countries that offer high dividend yields. Additionally, stocks must have positive 3-year earnings growth and profitability. Stocks are weighted by annual dividend yield. To ensure diverse exposure, no single country or sector has more than a 25% weight and no single stock has more than a 3% weight.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.88%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Taiwan Semiconductor Manufacturing Co. Ltd. (2330-TW) accounts for about 4.20% of the fund's total assets, followed by China Resources Land Limited (1109-HK) and Hengan International Group Co. Ltd. (1044-HK).
Its top 10 holdings account for approximately 33.79% of EDIV's total assets under management.
Performance and Risk
Year-to-date, the SPDR SP Emerging Markets Dividend ETF has lost about -17.33% so far, and is down about -17.12% over the last 12 months (as of 07/23/2020). EDIV has traded between $19.98 and $32.77 in this past 52-week period.
The ETF has a beta of 0.88 and standard deviation of 22.96% for the trailing three-year period, making it a medium risk choice in the space. With about 124 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR SP Emerging Markets Dividend ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $53.22 billion in assets, Vanguard FTSE Emerging Markets ETF has $60.85 billion. IEMG has an expense ratio of 0.13% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.