ProShares expands ‘dividend growers’ ETF range with emerging markets fund

Feb 9th, 2016 | By | Category: Equities

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US-based exchange traded fund provider ProShares has launched the ProShares MSCI Emerging Markets Dividend Growers ETF (BATS: EMDV) bringing its total suite of funds targeting companies with long-term records of consistent dividend increases to six. The firm’s strategy targets sustained dividend growth, which enhances income potential but also indicates financial strength meaning it can avoid lower quality firms.

ProShares expands ‘dividend growers’ ETF range with launch of emerging markets fund

Michael Sapir, Chairman and CEO of ProShares Advisors.

As a long-term strategy there is academic support for dividend investing. According to independent research firm Ned Davis Research, both US and international companies that grew their dividends year-on-year outperformed companies that did not between 1996 and 2015.

“Dividend growth investing is a strategy that has become more and more popular because it attempts to identify quality companies with the potential for outperformance and lower volatility,” said Michael L. Sapir, co-founder and CEO of ProShare Advisors, LLC, the advisor to ProShares. “We are pleased to add an emerging markets fund to our suite of dividend growers ETFs.”

The fund tracks the MSCI Emerging Markets Dividend Masters Index which screens stocks within the broad MSCI Emerging Markets Index, isolating those with at least seven consecutive years of dividend increases. The methodology allows for the inclusion of firms with shorter histories of dividend increases if a minimum of 40 constituents is not met through the initial screening process. Sector and country caps of 30% and 50% are also applied.

As of 5 February 2016, the top country weightings within the fund are China (20.0%), India (18.6%), South Africa (14.6%), Taiwan (9.2%) and Indonesia (6.1%). The primary sector exposures are to financials (30.0%), information technology (15.2%), consumer staples (14.4%), consumer discretionary (10.1%) and industrials (6.4%). The fund currently holds 58 securities which are equally weighted on a quarterly rebalancing schedule. A net expense ratio of 0.60% applies due to a contractual waiver in place until October 2017 at which point ongoing charges 1.04% will be incurred.

ProShares’ range of dividend growers ETFs now include six funds:

ProShares S&P 500 Dividend Aristocrats (NOBL)
ProShares S&P MidCap 400 Dividend Aristocrats (REGL)
ProShares Russell 2000 Dividend Growers (SMDV)
ProShares MSCI EAFE Dividend Growers (EFAD)
ProShares MSCI Europe Dividend Growers (EUDV)
ProShares MSCI Emerging Markets Dividend Growers ETF (EMDV)

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