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Is SPDR S&P Emerging Markets Dividend ETF (EDIV) a Strong ETF Right Now?
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Making its debut on 02/23/2011, smart beta exchange traded fund SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) provides investors 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
EDIV is managed by State Street Global Advisors, and this fund has amassed over $295.89 million, which makes 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.49%.
EDIV's 12-month trailing dividend yield is 3.38%.
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.
Taking into account individual holdings, Magnit Pjsc (B1393X) accounts for about 3.80% of the fund's total assets, followed by Haci Omer Sabanci Holding A.s. (SAHOL.E-TR) and First Abu Dhabi Bank P.j.s.c. (FAB-AE).
Its top 10 holdings account for approximately 27.25% of EDIV's total assets under management.
Performance and Risk
The ETF has gained about 11.73% so far this year and was up about 16.88% in the last one year (as of 11/17/2021). In the past 52-week period, it has traded between $26.54 and $31.46.
The ETF has a beta of 0.73 and standard deviation of 21.66% for the trailing three-year period, making it a medium risk choice in the space. With about 131 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Emerging Markets Dividend ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $80.95 billion in assets, Vanguard FTSE Emerging Markets ETF has $82.35 billion. IEMG has an expense ratio of 0.11% 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 S&P Emerging Markets Dividend ETF (EDIV) a Strong ETF Right Now?
Making its debut on 02/23/2011, smart beta exchange traded fund SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) provides investors 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
EDIV is managed by State Street Global Advisors, and this fund has amassed over $295.89 million, which makes 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.49%.
EDIV's 12-month trailing dividend yield is 3.38%.
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.
Taking into account individual holdings, Magnit Pjsc (B1393X) accounts for about 3.80% of the fund's total assets, followed by Haci Omer Sabanci Holding A.s. (SAHOL.E-TR) and First Abu Dhabi Bank P.j.s.c. (FAB-AE).
Its top 10 holdings account for approximately 27.25% of EDIV's total assets under management.
Performance and Risk
The ETF has gained about 11.73% so far this year and was up about 16.88% in the last one year (as of 11/17/2021). In the past 52-week period, it has traded between $26.54 and $31.46.
The ETF has a beta of 0.73 and standard deviation of 21.66% for the trailing three-year period, making it a medium risk choice in the space. With about 131 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P Emerging Markets Dividend ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $80.95 billion in assets, Vanguard FTSE Emerging Markets ETF has $82.35 billion. IEMG has an expense ratio of 0.11% 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.