On Monday, July 1, Emerging Global Advisors launched an exchange-traded fund devoted to companies domiciled in emerging-markets countries that have been growing their dividends faster than the average emerging-markets company's dividend growth.
EGShares Emerging Markets Dividend Growth ETF (EMDG) tracks an FTSE index of 50 companies located in emerging markets. The adjusted, free-float market-cap-weighted index caps the size of any one constituent to 2.5%. The index draws its constituents from a broader FTSE index, and looks for companies that have posted positive earnings per share for the past year and have paid dividends for each of the past five years. EMDG's index also requires constituents to have a minimum trailing five-year compound annual growth rate for their dividends of 6% and a minimum trailing one-year dividend yield that is greater than one half the dividend yield of the parent index. All of those criteria are required to ensure that only companies with high dividend quality, including a minimum level of dividend growth, are considered for EMDG's index.