ProShares MSCI Emerging Markets Dividend Growers ETF (EMDV) seeks to track the MSCI Emerging Markets Dividend Masters Index, which measures companies in developing markets that have consistently increased their dividend payments over multiple years. This income-focused emerging markets ETF targets dividend-growing companies across countries like China, Taiwan, India, and South Korea.
How It Works
EMDV uses a rules-based approach that screens emerging market companies for consistent dividend growth over at least five years, then weights holdings by market capitalization. The fund focuses on established dividend payers rather than highest-yielding stocks, emphasizing sustainability of payments. Holdings are rebalanced quarterly to maintain index alignment. The strategy combines emerging market growth potential with income generation through companies demonstrating financial discipline and shareholder-friendly policies.
Key Features
- Focuses on dividend growth sustainability rather than just high current yields, filtering for companies with 5+ year payment increases
- Provides emerging market exposure through financially stable, dividend-committed companies rather than speculative growth stocks
- Offers geographic diversification across major developing economies while maintaining income generation focus for emerging market allocation
Risks
- This ETF can lose value when emerging market currencies weaken against the dollar, reducing both dividend income and principal value for U.S. investors
- Dividend cuts during economic downturns could trigger significant selling as companies fail to meet growth criteria, forcing index reconstitution
- Emerging market volatility could cause 40-60% declines during global crises, as developing economies face greater political and economic instability than developed markets
Who Should Own This
Best suited for income-focused investors with 7+ year time horizons seeking emerging market exposure through established dividend payers. High risk tolerance required due to emerging market volatility and currency fluctuations. Works as satellite holding (5-15% of portfolio) for investors wanting international income diversification beyond developed market dividend ETFs.