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Is iShares Emerging Markets Dividend ETF (DVYE) a Strong ETF Right Now?
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A smart beta exchange traded fund, the iShares Emerging Markets Dividend ETF (DVYE - Free Report) debuted on 02/23/2012, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $650.42 million, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. DVYE seeks to match the performance of the Dow Jones Emerging Markets Select Dividend Index before fees and expenses.
The Dow Jones Emerging Markets Select Dividend Index measures the performance of the companies in emerging market countries that have provided relatively high dividend yields on a consistent basis over time.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.49% for DVYE, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.13%.
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.
Looking at individual holdings, Telkom Soc Ltd Sa (TKG) accounts for about 2.48% of total assets, followed by Indiabulls Housing Finance Ltd (IBULHSGFIN) and Veon Adr Ltd (VEON - Free Report) .
DVYE's top 10 holdings account for about 17.45% of its total assets under management.
Performance and Risk
The ETF has lost about -17.49% so far this year and is down about -15.21% in the last one year (as of 07/27/2020). In the past 52-week period, it has traded between $25.94 and $41.99.
The fund has a beta of 0.91 and standard deviation of 21.67% for the trailing three-year period, which makes DVYE a medium risk choice in this particular space. With about 151 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares 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 $52.74 billion in assets, Vanguard FTSE Emerging Markets ETF has $60.29 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 iShares Emerging Markets Dividend ETF (DVYE) a Strong ETF Right Now?
A smart beta exchange traded fund, the iShares Emerging Markets Dividend ETF (DVYE - Free Report) debuted on 02/23/2012, and offers broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $650.42 million, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. DVYE seeks to match the performance of the Dow Jones Emerging Markets Select Dividend Index before fees and expenses.
The Dow Jones Emerging Markets Select Dividend Index measures the performance of the companies in emerging market countries that have provided relatively high dividend yields on a consistent basis over time.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.49% for DVYE, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 7.13%.
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.
Looking at individual holdings, Telkom Soc Ltd Sa (TKG) accounts for about 2.48% of total assets, followed by Indiabulls Housing Finance Ltd (IBULHSGFIN) and Veon Adr Ltd (VEON - Free Report) .
DVYE's top 10 holdings account for about 17.45% of its total assets under management.
Performance and Risk
The ETF has lost about -17.49% so far this year and is down about -15.21% in the last one year (as of 07/27/2020). In the past 52-week period, it has traded between $25.94 and $41.99.
The fund has a beta of 0.91 and standard deviation of 21.67% for the trailing three-year period, which makes DVYE a medium risk choice in this particular space. With about 151 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares 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 $52.74 billion in assets, Vanguard FTSE Emerging Markets ETF has $60.29 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.