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Is SPDR S&P Emerging Markets Dividend ETF (EDIV) a Strong ETF Right Now?
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Launched on 02/23/2011, the SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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
Managed by State Street Global Advisors, EDIV has amassed assets over $293.34 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for EDIV are 0.49%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Fomento Economico Mexicano Sab De Cv Sponsored Adr Class B (FMX - Free Report) accounts for about 3.32% of the fund's total assets, followed by Power Grid Corporation Of India Limited (532898-IN) and Chung-Hsin Electric & Machinery Manufacturing Corp. (1513-TW).
EDIV's top 10 holdings account for about 27.07% of its total assets under management.
Performance and Risk
The ETF return is roughly 10.26% so far this year and was up about 26.17% in the last one year (as of 10/01/2021). In the past 52-week period, it has traded between $24.01 and $31.46.
The fund has a beta of 0.75 and standard deviation of 22.20% for the trailing three-year period, which makes EDIV a medium risk choice in this particular space. With about 125 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 $78.45 billion in assets, Vanguard FTSE Emerging Markets ETF has $78.49 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?
Launched on 02/23/2011, the SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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
Managed by State Street Global Advisors, EDIV has amassed assets over $293.34 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for EDIV are 0.49%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Fomento Economico Mexicano Sab De Cv Sponsored Adr Class B (FMX - Free Report) accounts for about 3.32% of the fund's total assets, followed by Power Grid Corporation Of India Limited (532898-IN) and Chung-Hsin Electric & Machinery Manufacturing Corp. (1513-TW).
EDIV's top 10 holdings account for about 27.07% of its total assets under management.
Performance and Risk
The ETF return is roughly 10.26% so far this year and was up about 26.17% in the last one year (as of 10/01/2021). In the past 52-week period, it has traded between $24.01 and $31.46.
The fund has a beta of 0.75 and standard deviation of 22.20% for the trailing three-year period, which makes EDIV a medium risk choice in this particular space. With about 125 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 $78.45 billion in assets, Vanguard FTSE Emerging Markets ETF has $78.49 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.