Wednesday 16 January 2013

Portfolio Buy: SPDR S&P Emerging Markets Dividend ETF (LSE:EMDV)

 As part of my New Year drive to diversify geographically, I am now heading for the 'Emerging Market' - or more accurately, the Wild West (and East) of investing.

As I noted in a previous post, I am using Exchange Traded Funds and focusing on income-producing securities, buying (where possible) matching pairs of ETFs in high-yield dividend shares and fixed-income.

The first of this 'Emerging Markets' pair of ETFs is the SPDR S&P Emerging Markets Dividend ETF, which is  is an open-end, UCITS-compliant (EU standard for collective funds), Exchange Traded Fund domiciled in Ireland and managed by State Street.

The aim of the SPDR S&P Emerging Markets Dividend UCITS ETF is to track the equity market performance of high-yielding stocks from emerging markets, tracking the S&P Emerging Markets Dividend Opportunities Index as closely as possible.  The managers quote the weighted average of gross dividend yield of stocks in the fund as around 7.5% with an average p/e of 9.3. However, the actual yield of the holding is only around 5.4% based on the US$ payments - which are a bit difficult to find on the SPDR website. Why this is so much less than the yield on the underlying holdings is an open question. The distribution of income is semi-annual.

The ETF is quoted in GBP on the LSE. The top holdings are diversified geographically including Poland, Turkey, Brazil and Brazil. The Total Expense Ratio is 0.65% - a bit pricey but then this is a huge geographical spread to deal with.

[Purchase price: £15.40]

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.


  1. Hi

    If you click on the accounts on the website you can find a breakdown of the deductions which seem to be withholding taxes and expenses.

    Bought some today as now seems a good time to start moving some funds back into emerging markets

  2. What a difference a year makes. -25%

    1. Hi Anon

      You're right unfortunately. EM have gone right out of favour - but this may be an opportunity. I have piled in on a related investment CLIG.