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Is iShares Emerging Markets Dividend ETF (DVYE) a Strong ETF Right Now?

Smart Beta ETF report for DVYE

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This story originally appeared on Zacks

Making its debut on 02/23/2012, smart beta exchange traded fund iShares Emerging Markets Dividend ETF (DVYE) provides investors broad exposure to the Broad Emerging Market ETFs category of the market.

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What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

The fund is managed by Blackrock. DVYE has been able to amass assets over $813.49 million, making it one of the larger ETFs in the Broad Emerging Market ETFs. DVYE, before fees and expenses, seeks to match the performance of the Dow Jones Emerging Markets Select Dividend Index.

The Dow Jones Emerging Markets Select Dividend Index measures the performance of the companies in emerging market countries that have provided relatively high dividend yields on a consistent basis over time.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 6.84%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Globaltrans Investment Gdr Plc (GLTR) accounts for about 2.45% of total assets, followed by Transmissora Alianca Energia Eletr (TAEE11) and Cteep Companhia De Transmissao De (TRPL4).

The top 10 holdings account for about 17.49% of total assets under management.

Performance and Risk

The ETF has added about 11.29% so far this year and it's up approximately 39.19% in the last one year (as of 10/04/2021). In the past 52-week period, it has traded between $29.70 and $41.57.

DVYE has a beta of 0.86 and standard deviation of 22% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 118 holdings, it effectively diversifies company-specific risk.

Alternatives

IShares Emerging Markets Dividend ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard FTSE Emerging Markets ETF (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $78.50 billion in assets, iShares Core MSCI Emerging Markets ETF has $78.55 billion. VWO has an expense ratio of 0.10% and IEMG charges 0.11%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.



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iShares Emerging Markets Dividend ETF (DVYE): ETF Research Reports

 

iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports

 

Vanguard FTSE Emerging Markets ETF (VWO): ETF Research Reports

 

Aberdeen Standard Physical Precious Metals Basket Shares ETF (GLTR): ETF Research Reports

 

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