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Is SPDR S&P Emerging Markets Dividend ETF (EDIV) a Strong ETF Right Now?
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The SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) made its debut on 02/23/2011, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EDIV is managed by State Street Global Advisors, and this fund has amassed over $433.16 M, which makes it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, EDIV 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for EDIV are 0.49%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.86%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co. Ltd. (2330-TW) accounts for about 3.80% of total assets, followed by China Resources Land Limited (1109-HK) and Hengan International Group Co. Ltd. (1044-HK).
The top 10 holdings account for about 29.4% of total assets under management.
Performance and Risk
The ETF has lost about -0.78% and was up about 7.71% so far this year and in the past one year (as of 01/07/2020), respectively. EDIV has traded between $28.88 and $33.14 during this last 52-week period.
The ETF has a beta of 0.78 and standard deviation of 15.67% for the trailing three-year period, making it a medium risk choice in the space. With about 132 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 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 $62.06 B in assets, Vanguard FTSE Emerging Markets ETF has $67.08 B. IEMG has an expense ratio of 0.14% and VWO charges 0.12%.
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?
The SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) made its debut on 02/23/2011, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
EDIV is managed by State Street Global Advisors, and this fund has amassed over $433.16 M, which makes it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, EDIV 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for EDIV are 0.49%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.86%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co. Ltd. (2330-TW) accounts for about 3.80% of total assets, followed by China Resources Land Limited (1109-HK) and Hengan International Group Co. Ltd. (1044-HK).
The top 10 holdings account for about 29.4% of total assets under management.
Performance and Risk
The ETF has lost about -0.78% and was up about 7.71% so far this year and in the past one year (as of 01/07/2020), respectively. EDIV has traded between $28.88 and $33.14 during this last 52-week period.
The ETF has a beta of 0.78 and standard deviation of 15.67% for the trailing three-year period, making it a medium risk choice in the space. With about 132 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR S&P 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 $62.06 B in assets, Vanguard FTSE Emerging Markets ETF has $67.08 B. IEMG has an expense ratio of 0.14% and VWO charges 0.12%.
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.