Investors can get all kinds of benefits by going abroad now. Faced with highly priced equities domestically as well as high inflation, US investors may want to diversify. One area that is attractive at the moment is emerging markets, offering the upside without the same issues of rising rates. Adding dividends can also help. Emerging Markets Dividend ETF EDOG may attract those investors, especially since the ETF is sending a significant buy signal.
Many emerging markets saw their central banks raise rates significantly. Earlier the US Federal Reserve helped in controlling inflation., This, for example, contributes to the broader case for emerging markets equities, along with a boom in global commodity demand. Overall economic growth in countries such as India and even China, despite the slowdown, could also attract investors wary of costly US overconsumption.
Those actors may prompt investors to consider emerging markets dividend ETFs. Investors can count on dividends to help market sectors with little information in some emerging markets. Healthy dividends help indicate which companies can beat competitors even in certain specific areas. In such, ALPS Emerging Sector Dividend Dogs ETF (EDOG) may present an interesting alternative.
See more: “Q&A with Paul Biocchi, Chief ETF Strategist of SS&C ALPS Advisors”
The EDOG tracks the S-Network Emerging Sector Dividend DOGS Index, which gives equal weighting to ten different GICS sectors, excluding real estate. It then invests in the five best dividend-yielding stocks within each of those sectors. This empowers EDOG to invest in emerging markets to find companies that could theoretically offer strong opportunities because of their dividends.
The Emerging Markets Dividend ETF holds roughly 50 stocks, considering that the prices of companies with solid dividends can often be lower than their true value. EDOG charges 60 basis points (bps) and returns 13.2% YTD. The strategy is also sending a major buy signal, with the price rising above the 200-day Simple Moving Average (SMA) as of Friday. For investors who are looking to go abroad, EDOG can be a good strategy.
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www.vettafi.com is owned by VetaFi LLC (“VettaFi”). VetaFi is the index provider for EDOG, for which it receives an index license fee. However, EDOG is not issued, sponsored, endorsed or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing or merchandise of EDOG.
Source: www.etftrends.com
