SDEM which pays out monthly distributions is a passively managed ETF that focuses on 50 high yielding EM stocks. We highlight how SDEM is positioned relative to SDIV which focuses on 100 high yielding global stocks. We close with some thoughts on why SDEM may not make for a good buy now.
| XBER Exchange | US Country |
This fund is designed for investors seeking exposure to emerging markets through a portfolio of dividend yielding equity securities. By focusing on the top 50 equally-weighted companies that have the highest dividend yields in these markets, as defined by MSCI, the fund aims to provide an attractive investment opportunity. It primarily invests in securities that are part of its underlying index, as well as American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) that are based on these securities. This strategic approach allows the fund to harness the growth potential of emerging markets while offering the potential for income through dividends.
The fund allocates at least 80% of its total assets in the securities that constitute the underlying index. These are equity securities of companies based in emerging markets with high dividend yields. The investment in securities seeks to replicate the performance of the underlying index, providing investors with a diversified exposure to high-yielding investment opportunities in emerging economies.
In addition to direct investments in securities, the fund also invests in ADRs and GDRs. These instruments are based on the securities of the underlying index and offer a practical way for the fund to gain exposure to foreign stocks. ADRs and GDRs represent shares in foreign companies and are traded on U.S. and global markets, respectively, making it easier for investors to benefit from the growth and dividend payouts of companies in emerging markets without the complexities of cross-border transactions.