Among diversified, multi-country emerging markets ETFs, the
Vanguard FTSE Emerging Markets ETF (NYSE:
) and the iShares MSCI Emerging Markets ETF (NYSE:
) reign supreme. The two are not just the two biggest emerging
markets ETFs, they are two of the 10 largest U.S. ETFs of any
While VWO and EEM have dominant perches in the world of
emerging markets ETFs, they are not without legitimate
competition. The $5 billion WisdomTree Emerging Markets Equity
Income Fund (NYSE:
) and a few others stand as credible complements or alternatives
to EEM and VWO.
These ETFs Will Soon Pass Their 200-Day Lines
Still, there are other options to consider among diversified
developing world ETFs. Just take a look these funds your broker
probably forgot to mention.
WisdomTree Emerging Markets Dividend Growth Fund (NASDAQ:
) It is forgivable that advisors and brokers may not have told
their clients about the WisdomTree Emerging Markets Dividend
Growth Fund yet because the fund is just six weeks old. However,
DGRE has done an admirable job of attracting assets, over $15
million, in that time. That could be a sign investors have not
given up on the dividend and emerging markets themes.
DGRE offers the income-minded emerging markets investor
utility on multiple fronts. First, the new ETF features a 15.1
percent allocation to Brazil, so investors that want some
exposure to Latin America's largest economy
without the commitment and risk
of a single-country fund can get that exposure with DGRE.
Second, with Russia, China and Taiwan combining for about 26
percent of DGRE's weight, the new ETF is not only well-allocated
to some of the more dividend destinations in the developing
world, but also some of the markets that trade at the deepest
discounts relative to benchmark emerging markets indices.
iShares MSCI Emerging Markets Asia ETF (NYSE:
) The iShares MSCI Emerging Markets Asia ETF does not get a lot
of press, but if the current rally in developing world equities
proves durable, this ETF is worth considering. EEMA says "Asia"
in its name, but investors should take a deeper look before
jumping to conclusions.
Given the intense volatility and savage losses delivered by
tracking India, Indonesia and Thailand
, investors may not want to embrace a multi-country ETF focused
exclusively on Asia. The good news is those countries combine for
just 17 percent of EEMA's weight.
An easy way of explaining this ETF, which is up 4.7 percent in
the past week is that its largest holdings are many of the
familiar stocks found in the top-10 lineups of the iShares China
Large-Cap ETF (NYSE:
), the iShares MSCI Taiwan ETF (NYSE:
) and the iShares MSCI South Korea ETF (NYSE:
). Those countries combine for 74 percent of EEMA's weight.
And do not be put off by EEMA's size. Since the ETF is
allocated to large- and mega-caps, many of which trade in the
U.S., it rarely trades at more than half percent premium or
discount to its net asset value,
according to iShares data
EGShares EM Dividend High Income ETF (NYSE:
) Although it has been a rough year for emerging markets ETFs,
some issuers have continued to bring new, related products to
market and many
combine dividends and emerging markets
EMHD tracks the FTSE Equal Weighted Emerging All Cap ex Taiwan
Diversified Dividend Yield 50 Index and like the aforementioned
DGRE, debuted last month. What is nifty about some of the
EGShares ETFs, including EMHD, is that the funds either eschew
BRIC exposure or have little to no weights to highly developed
emerging markets like South Korea and Taiwan. The latter is the
case with EMHD.
Brazil, South Africa and China combine for over 53 percent of
this fund's weight. Interestingly, EMHD is not excessively
weighted to mega-cap companies as the average market cap in its
index is just $7.14 billion. More interesting to income investors
8.8 percent index dividend yield
For more on ETFs, click
Disclosure: Author is long DEM.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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