Emerging Global Advisors, the NY-based specialist ETF issuer known for its suite of emerging markets funds, has announced the launch of the EGShares Emerging Markets Dividend Growth ETF (EMDG), the second dividend fund after the EGShares Low Volatility Emerging Markets Dividend ETF (HILO). The ETF, unveiled on Monday and listed on the NYSE Arca, gives investors exposure to developing market companies that are maturing and focusing more on raising dividends.
EMDG comes at a time when investors are casting their nets wider in search of yields and are willing to diversify their dividend yield sources. The ETF tracks the FTSE Emerging All Cap Ex-Taiwan Diversified Capped Dividend Growth 50 Index, a benchmark co-designed by Emerging Global Advisors and FTSE that represents the performance of 50 emerging market companies that have consistently demonstrated the ability to grow dividends over the past five years. Additionally, the companies are subjected to a series of screens to ensure future dividend sustainability.
To be included in the underlying benchmark – which is a free-float market capitalization weighted index, a company must first be a component of the FTSE Emerging All Cap Ex-Taiwan Universe. It must also have a compound annual dividend growth rate of six percent over the past five years. Constituent companies can be small -, medium -, and large-capitalized with each individual holding quarterly capped at 2.5 percent.
Also, Minimum investable market capitalization should be 95 percent or greater of the index universe float and minimum average daily trading volume for trailing three months should be $0.5 million. The index components have an average market cap $14.6 billion and a median market cap of 15.99 billion.
Sector wise, financials get the top billing with a little of 20 percent in assets, followed by oil and gas, consumer goods, industrials and utilities. Geography wise, China contributes the most with 19.5 percent, followed by South Africa (17 percent), Brazil (15.8 percent), Indonesia (10.9 percent) and Malaysia (8.2 percent). The underlying index has a dividend yield of 3.87 percent.
EMDG has a net expense ratio of 0.85 percent.
Disclosure: No holdings
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