Emerging Global Advisors today launched the EGShares Emerging
Markets Dividend Growth ETF (NYSEArca:EMDG), making it what the
company called the first emerging markets dividend growth
exchange-traded fund at a time when many developing-markets
companies are maturing and turning their attention to raising
EMDG, which is based on the FTSE Emerging All Cap ex-Taiwan
Diversified Capped Dividend Growth 50 Index, comes with an annual
expense ratio of 0.85 percent, or $85 for each $10,000 invested-a
similar price tag to many funds marketed by the New York-based firm
that focuses exclusively on
targeting the developing world.
"Many emerging market-based multinational companies have
demonstrated their ability to increase dividends," Marten Hoekstra,
Emerging Global's chief executive officer, said today in a press
release. of Emerging Global Advisors. "We launched EMDG as an
investment tool to enable dividend growth investors to implement
their investment strategy in emerging markets and diversify
dividend yield sources."
Emerging Global's aim to bring to market a yield-rich fund is
hardly new, but its focus on a dividend growth strategy in the
emerging markets is. In sum, the rollout reflects concerns about
the low-rate environment that follows the crash of 2008-2009, and
growing fears that all but short-dated bonds present investors with
the very real prospect of capital losses as the Federal Reserve
begins to shift policy toward normalizing official rates.
Emerging Global Advisors and FTSE collaborated to design the
FTSE index on which the fund is based. The screen takes into
account dividend quality and growth, and dividend payout
EGShares' marketing of the fund is also consistent with a turn
the company has made since its splashy 2009 debut that was
characterized by bringing to market many strategies that in some
ways were too specific in geography and theme for investors still
getting comfortable with broad ETFs such as the iShares MSCI
Emerging Markets Index Fund (NYSEArca:EEM).
Since then, Emerging Global has tended to focus on strategies
that encompass all the various developing markets, but that are
packaged in themes-such as dividend growth-that resonate in broader
The nearly $1 billion EGShares Emerging Markets Consumer ETF
(NYSEArca:ECON) is the ultimate example of this shift, and it now
commands more than 75 percent of all the firm's assets.
Emerging Global-including EMDG-now has 23 funds, with a total of
$1.31 billion in assets under management, according to data
compiled by IndexUniverse.
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