Dividends from Emerging Markets

By Genia Turanova, Editor, Leeb Group

Investors should consider diversifying with emerging market ETFs, suggests Genia Turnanova, although the advisor cautions that investors should stay mindful of risks, as these markets are typically volatile. Here, the editor of Leeb Income Performance highlights an exchange-traded fund.  She writes:

I believe SPDR S&P Emerging Markets Dividend ETF (EDIV) remains a good way to invest in the potential recovery in emerging markets.

Brazil is its number one country, with 22% of the ETF's total assets invested there. Other countries represented: China (13%), Taiwan (13%), South Africa (10%), Poland (10%), Turkey (8%), Thailand (5% on total assets), and more.

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 in the index. Top sectors are financials, with about 24% of the fund's assets, utilities with 19%, materials with 17%, and telecoms at 12%.

Stocks in the index trade at a forward Price to Earnings of 10, and a yield of 6.8% that collectively present an attractive relative valuation case.

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SPDR S&P Emerging Markets Dividend ETF (EDIV) is a component of the D2 Capital Management Multi-Asset Income Portfolio. 

Disclosure:  I own the D2 Capital Management Multi-Asset Income Portfolio

The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

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