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ETF News And Commentary

When most investors consider emerging market ETFs, they focus in on big name products like the Vanguard FTSE Emerging Markets ETF (VWO - ETF report) or iShares’ counterpart, the MSCI Emerging Markets Index ETF (EEM - ETF report). However, there are now plenty of other options out there that can provide investors with a completely new way of tackling these surging developing nations.

This is especially true in the high yield market, as there are now some quality choices in emerging markets that can provide investors with outsized payouts on a regular basis. In particular, there are two great choices in this space that stand out, the iShares Emerging Markets Dividend ETF (DVYE - ETF report), and the SPDR S&P Emerging Markets Dividend ETF (EDIV - ETF report).

These two ETFs offer up broad exposure across countries in the emerging market world, with a heavy focus on BRIC nations, plus big markets like Taiwan, South Africa, and Turkey. While this suggests that both may help from a diversification perspective, the real promise of these ETFs is due to their impressive yields (also see Three Overlooked Emerging Market ETFs).

Both ETFs pay out more than 6% in 30-Day SEC yield, making them great alternatives to not only bonds, but other higher yielding equities as well. And if you believe in continued growth in these nations, this could be a relatively low-risk to invest in these markets going forward.

But what else should investors know about these two impressive products?

For those curious about some more pros and cons in the emerging market dividend ETF space, check out our latest Exploring ETFs video which discusses this topic—as well as EDIV and DVYE—in greater detail.

 

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