Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Building Blocks Channel
  2. Emerging Markets Value Could Be Long-Term Champion
ETF Building Blocks Channel
Share

Emerging Markets Value Could Be Long-Term Champion

Tom LydonSep 24, 2021
2021-09-24

Domestic value stocks are garnering plenty of attention this year, and the returns for the asset class in the first half of the year were worthy of adulation.

While some of that momentum ebbed, value equities still have some catalysts, including precedent for performing well during inflationary climates, the possibility that Treasury yields will rise anew, and the fact that the current value rally is still young by historical standards.

Domestic value stocks may look attractive today, and some are, but investors shouldn’t ignore international equivalents, including emerging markets fare. On that note, the ALPS Emerging Sector Dogs ETF (EDOG A-) is an exchange traded fund to consider. In fact, inflation is a big reason to consider emerging markets value.

“So, value looks priced to give us about a 4% real return above inflation, still kind of anemic. Emerging markets are priced to give you about 5%, and emerging-markets value—value stocks within emerging markets, avoiding the highfliers in the emerging markets—are priced to give you about a 9.5% real return, well, add in inflation and that’s probably a 12% return per annum for 10 years,” says Research Affiliates Chairman and founder Rob Arnott.

While Arnott is careful to note that it’s not clear that this scenario will play out over the next 12 months, it is clear that EDOG is up over 10% year-to-date while the MSCI Emerging Markets Index is lower by 1.32%. Add to that, Arnott sees “extraordinary opportunities” in emerging markets value.

ALPS Emerging Sector Dividend Dogs ETF

Unlike traditional value ETFs, both foreign and domestic, EDOG isn’t excessively weighted to one or two sectors because the fund’s sector exposure are equally weighted. Currently, EDOG’s sector allocations range from 9.21% to 10.52%.

Additionally, EDOG’s geographic methodology is a perk at a time when Chinese stocks are roiling the broader emerging markets complex, perhaps distracting investors from solid performances in other regions. As just two examples, EDOG is overweighting Mexican and Russian equities relative to the MSCI Emerging Markets Index, and stocks in both of those countries are sharply higher this year.

EDOG delivers those benefits with a dividend yield of 2.96%, which is well in excess of the yields on both the MSCI Emerging Markets Index and the S&P 500 Value Index.

Other emerging markets dividend ETFs include the ProShares MSCI Emerging Markets Dividend Growers ETF (EMDV ), the iShares Emerging Markets Dividend ETF (DVYE A-), and the WisdomTree Emerging Markets Equity Income Fund (DEM A-).

For more on cornerstone strategies, visit our ETF Building Blocks Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X