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iShares Drafts Emerging Dividend ETF

Cinthia Murphy

iShares, the world’s largest ETF firm, is taking steps to launch another two dividend ETFs, one focused on emerging market securities and the other targeting the Asia/Pacific region, adding to a growing stable of ETFs that serve up dividend-paying stocks in the developing world.

The iShares Emerging Market Dividend Index Fund , as well as its more tightly focused Asian counterpart, the iShares Asia/Pacific Dividend 30 Index Fund , will each track a respective Dow Jones Select Dividend benchmark. They would both invest in local firms that have consistently provided high dividend yields over time.

By far the biggest ETF focused on high-yielding emerging market companies currently on the market is the WisdomTree Emerging Markets Equity Income (NYSEArca:DEM - News), which has gathered $1.9 billion since its mid-2007 launch.

Other funds in the space include the SPDR S'P Emerging Markets Dividend (NYSEArca:EDIV - News), which has gathered about $112 million since its launch earlier this year. Also, there’s the EGShares Low Volatility Emerging Markets Dividend ETF (NYSEArca:HILO - News), which has just under $20 million in assets.

Dividend ETFs aren’t new, but they are increasingly popular as investors look for reliable income-generating stocks as a way to temper volatile markets. But strategies that combine the growing demand for income with the prospective elements of the developing world are still relatively few.

Most of the dividend ETFs on the market are U.S. focused or global in scope, such as offerings from WisdomTree, Guggenheim, First Trust as well as State Street Global Advisors, Global X Funds and Schwab.

iShares, too, has a pair of dividend ETFs:the $7 billion iShares Dow Jones Select Dividend Index Fund (NYSEArca:DVY - News) and the $553 million iShares Dow Jones International Select Dividend Index Fund (NYSEArca:IDV - News).

The new iShares emerging markets dividend fund would include companies from BRIC nations—Brazil, Russia, India and china—as well as from South Korea, Taiwan, Turkey and another dozen countries, excluding frontier markets, the filing said.

The Asia-Pacific ETF would tap into Australia, Hong Kong, Japan, New Zealand and Singapore, according to its filing.

iShares didn’t disclose tickers or fees in the filings.

 

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