Emerging Global Advisors today launched the EGShares Emerging Markets Dividend Growth ETF, the first emerging markets (EM) dividend growth exchange-traded fund (ETF), which aims to provide investors with a total return approach to investing in quality companies within the FTSE Emerging All Cap ex Taiwan Universe that have achieved consistent dividend growth over the past five years.
Dividend growth is an important investment theme among U.S. investors. Rapid growth of EM-headquartered companies has created a potential opportunity for dividend growth investors to obtain exposures in emerging markets. As a result of the maturation of many EM companies, more of them have initiated or increased dividend payouts, distributing a greater proportion of their profits to shareholders.
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Dividends have been an important source of emerging market total return, contributing about one-third,(1) and have sometimes been a factor in dampening portfolio volatility.
"Many emerging market-based multinational companies have demonstrated their ability to increase dividends," said Marten Hoekstra, CEO 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 Advisors and FTSE collaborated to design the FTSE Emerging All Cap ex Taiwan Diversified Capped Dividend Growth 50 Index, which takes into account dividend quality and growth, and dividend payout ratios. The Fund tracks this Index. EGShares Emerging Markets Dividend Growth ETF trades on NYSE Arca under the ticker symbol EMDG. The ETF is passively managed and does not use options, swaps or other derivatives in its portfolio.
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