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This article was originally published in ETFTrends. com.
The ALPS Emerging Sector Dividend Dogs (EDOG) ETF, which was among the most popular ALPS ETFs last month, measured through net inflows, yielded -10. 25% in June.
Emerging markets were negatively affected in June by emerging global inflation and developing fears of a global recession. Expectations of global expansion continued to be affected by chain disruptions, the war in Ukraine and the threat of stagflation.
While all sectors of EDOG provided negative returns during the month, there are still strategic reasons why investors allocate assets to this fund. A new narrative has emerged in recent weeks as investors wonder if it’s time to start buying stocks again, raising old valuations.
EDOG’s month-end price-to-earnings ratio of 7. 81x remains at a significant reduction from the Morningstar P/E Emerging Markets Index of 10. 31x, ALPS wrote in a recent preview. The outlook for the source of income seekers is also strong. EDOG’s core index, EDOGX, has a dividend yield of 7. 64%, far surpassing the comparable Morningstar Emerging Markets Index (MEMMN) benchmark of 3. 41%, according to ALPS.
EDOG’s underlying index has a dividend yield superior to the primary emerging market indices in 12 months due to its relative obesity of high-yielding names in Malaysia, South Africa and Chile.
China’s EDOG names were a glimmer of hope in June despite a challenging month for emerging markets, driven higher through a possible easing of 0 COVID policy and financial easing in the country, ALPS wrote.
As for EDOG’s Chinese holdings, Huadian Power Intl Corp-H (1071 HK, weight of 2. 20% as of June 30) posted 1. 76% after the government began easing its Zero COVID policy, as well as an improved outlook for the power manufacturer due to falling commodity costs leading to higher margins.
Within EDOG, Brazil recorded the highest performance (7. 14%) above the Morningstar Emerging Markets Benchmark Index (MEMMN), according to ALPS. The Brazilian corporate force Centrais Eletricas BR-SP (EBR USA)The U. S. economy, with a weighting of 2. 28% as of June 30) gained 0. 91%. after the Brazilian government approved a bill to privatize the company, which remains the largest supplier of electricity in Latin America, diluting the 61% stake of the state.
Other emerging market ETFs to come with the BNY Mellon Emerging Markets Equity ETF (BKEM) and the Invesco BLDRS Emerging Markets 40 ADR (ADRE) index fund.
For more news, data and strategy, the ETF Building Blocks channel.
vettafi. com belongs to VettaFi, which also owns EDOG’s index provider. VettaFi is the sponsor of EDOG, but the VettaFi associate receives an index license payment from the ETF sponsor.
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