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Is SPDR S&P Emerging Markets Dividend ETF (EDIV) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) is a smart beta exchange traded fund launched on 02/23/2011.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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 sponsored by State Street Global Advisors. It has amassed assets over $202.49 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund seeks to match the performance of the S&P Emerging Markets Dividend Opportunities Index before fees and expenses.
The S&P Emerging Markets Dividend Opportunities Index includes 100 tradable, exchange-listed common stocks from emerging market countries that offer high dividend yields.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.49% for EDIV, making it on par with most peer products in the space.
EDIV's 12-month trailing dividend yield is 4.57%.
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.
When you look at individual holdings, Ase Technology Holding Co. Ltd. (3711-TW) accounts for about 3.96% of the fund's total assets, followed by Banco Do Brasil S.a. (BBAS3-BR) and China Resources Land Limited (1109-HK).
Its top 10 holdings account for approximately 10.05% of EDIV's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Emerging Markets Dividend ETF has added roughly 8.17% so far, and is down about -12.09% over the last 12 months (as of 01/24/2023). EDIV has traded between $21.74 and $31.73 in this past 52-week period.
EDIV has a beta of 0.65 and standard deviation of 22.01% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 129 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 $72.28 billion in assets, Vanguard FTSE Emerging Markets ETF has $74.80 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the SPDR S&P Emerging Markets Dividend ETF (EDIV - Free Report) is a smart beta exchange traded fund launched on 02/23/2011.
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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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 sponsored by State Street Global Advisors. It has amassed assets over $202.49 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund seeks to match the performance of the S&P Emerging Markets Dividend Opportunities Index before fees and expenses.
The S&P Emerging Markets Dividend Opportunities Index includes 100 tradable, exchange-listed common stocks from emerging market countries that offer high dividend yields.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.49% for EDIV, making it on par with most peer products in the space.
EDIV's 12-month trailing dividend yield is 4.57%.
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.
When you look at individual holdings, Ase Technology Holding Co. Ltd. (3711-TW) accounts for about 3.96% of the fund's total assets, followed by Banco Do Brasil S.a. (BBAS3-BR) and China Resources Land Limited (1109-HK).
Its top 10 holdings account for approximately 10.05% of EDIV's total assets under management.
Performance and Risk
Year-to-date, the SPDR S&P Emerging Markets Dividend ETF has added roughly 8.17% so far, and is down about -12.09% over the last 12 months (as of 01/24/2023). EDIV has traded between $21.74 and $31.73 in this past 52-week period.
EDIV has a beta of 0.65 and standard deviation of 22.01% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 129 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 $72.28 billion in assets, Vanguard FTSE Emerging Markets ETF has $74.80 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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.