iShares Emerging Markets Dividend Index Fund

At the end of February this year, iShares launched a new ETF; iShares Emerging Markets Dividend Index Fund (DVYE), which holds 100 dividend-paying emerging-markets companies, weighted by annual yield. The new ETF clearly is designed to go after the sweet spot carved out by the very popular WisdomTree Emerging Markets Equity Income (DEM) fund.

Since the ETF was just launched in February, the market cap is very small. I chose to invest in DVYE rather than DEM, there is not a huge difference in the two, and recent charts show they move together closely. The Wisdom Tree fund (DEM) charges an 0.63% management fee, while the iShares fund (DVYE) charges 0.49%. Not a huge difference, but if this is a fund you plan to hold for the long-term this can add up.

Typically a smaller fund adds a fair amount of risk as they get everything up and running, as well as the risk of the fund not making it (or having the plug pulled). In this case I think iShares is committed to this fund, and I expect it will have substantial growth in net assets.

I chose this fund, and fund category, after looking at my US market dividend stocks and related funds. The growth in this area has been strong, and i wondered if these stocks and funds had all reached the end of their runs. This led me to look overseas at similar funds. Either fund should be a good play on both emerging markets, and the trend of growth in dividend stocks.