|By PR Newswire||
|November 28, 2012 09:30 AM EST||
CHICAGO, Nov. 28, 2012 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: WisdomTree Emerging Markets Equity Income Fund (AMEX:DEM), SPDR S&P Emerging Markets Dividend ETF (AMEX:EDIV) and Emerging Markets Dividend Index Fund (AMEX:DVYE).
Escape the Cliff with These Dividend ETFs
With the fiscal cliff just a few weeks away and the two parties still at odds, the nervous investors are looking for assets that may provide refuge from the cliff. (3 ETFs to Prepare for the Fiscal Cliff)
A new report released by the White House yesterday warned that the fiscal cliff could "slow real GDP growth by 1.4% and limit consumer spending during the holiday season".
Earlier this month the Congressional Budget Office said that the cliff would drive the U.S. economy back into recession next year and result in a jump in the jobless rate to 9.1% by the end of 2013.
Though the laws will change on January 1st, their actual impact will be felt over the course of next year. But the psychological impact of the changes is already visible as the businesses have curtailed investments and investors are selling stocks ahead of the potential capital gains tax hike.
While it is most likely that the two parties will reach some agreement, it remains to be seen what kind of changes they will agree to. They may agree to change the "threshold" for high-income or take away itemized deductions. It is possible that the dividend taxes may not go up for all the investors.
In anticipation of the increase in tax rate on dividend, many investors have been selling their dividend stocks. Some companies—particularly the ones will high insider ownership—are rushing to make accelerated or special dividends this year. (MLP ETFs: Unfortunate Victims of The Fiscal Cliff)
Currently the qualified dividends are taxed at 15% top rate, same as long-term capital gains rate. If the tax cuts are not extended, long-term capital gains tax will revert to 20% but the dividends will be taxed as income, at rates up to 39.6%. Additionally, there will be a 3.8% surcharge on investment income for investors with higher incomes.
While high-quality dividend-paying stocks still represent long-term value, it is almost certain that these stocks will experience further sell-off if the tax laws become unfavorable. (Biotech ETFs: A Fiscal Cliff Safe Haven?)
For investors who are concerned about the "dividend-cliff", an attractive option is to invest in the Emerging Markets Dividend ETFs that combine the opportunity to benefit from the higher growth potential in the emerging markets with the steady flow of dividend income in addition to providing the escape from the "fiscal-cliff" issues in the US.
Here are ten reasons for investing in Emerging Markets Dividend ETFs now:
1) The stocks held by these ETFs are not/will not be affected by the fiscal cliff issues, as these are mostly held by the investors who are not impacted by the U.S. tax laws.
2) About 70% of global dividends comes from the companies outside of the U.S. and hence by focusing just on the domestic companies, the investors are losing the bigger dividend opportunity.
3) Dividend payout ratios have been on a decline in the U.S. and the trend is expected to continue. Further, high corporate tax rates in the U.S. act as a disincentive to the large multinational corporations to repatriate their profits from international operations.
4) Emerging markets currently represent about one-third of global GDP and their share will continue to grow in the coming years. As such they ought to be a part of any investment portfolio.
5) The IMF projects that the emerging economies will grow at 5.6% in 2013, versus 1.5% growth for the developed economies and hence investment in emerging markets companies provides greater chances of capital appreciation.
6) These markets have low correlations with the developed markets and thus provide diversification benefits to the portfolio.
7) The emerging markets companies often offer a higher rate of dividend yield compared with the domestic companies.
8) Some of the U.S. stocks/sector ETFs that are high dividend payers have become expensive compared with the broader market, as the yield-starved investors poured money into them in the last 2-3 years.
9) If the U.S. actually goes over the cliff, the economy would fall into a recession next year, whereas many other countries—especially the ones with a high level of domestic consumption--will continue to grow unaffected by the global headwinds.
10) The largest and most important emerging economy—China—finally seems to be bottoming out.
WisdomTree Emerging Markets Equity Income Fund (AMEX:DEM)
DEM tracks the WisdomTree Emerging Markets Equity Income Index, which is a fundamentally weighted index that measures the performance of the high dividend yielding stocks in emerging markets. The fund has currently has more than $4.5 billion in assets under management and charges 63 basis points annually for operating expenses.
The funds assigns heaviest weight to Financials (26.7%), followed by Energy (18.5%) and Materials (18.2%).
In terms of country allocations, Taiwan is at the top (20.5%), followed by China (15.6%), Russia (13.2%) and Brazil (11.9%). Its annual dividend yield is 3.64% versus average US dividend yield of less than 2%.
SPDR S&P Emerging Markets Dividend ETF (AMEX:EDIV)
EDIV tracks S&P Emerging Markets Dividend Opportunities Index, consisting of dividend paying securities of 100 publicly-traded companies in emerging markets. The ETF was launched in February last year and has so far attracted $321 million in assets.
Currently, it is heaviest weighted in financials (21.8%), followed by Materials (20.3%) and Telecom (18.1%). Country weights for the top three are Brazil (18.8%), Taiwan (14.1%), and Poland (10.0%).
The expense ratio for this fund is 0.59%, and it pays out a very attractive dividend yield of 6.01%.
Emerging Markets Dividend Index Fund (AMEX:DVYE)
This ETF introduced very recently (February 24, 2012), is designed to compete with the popular WisdomTree ETF mentioned above by providing a lower cost alternative to the investors, while fulfilling similar investment objective.
The fund seeks to replicate the Dow Jones Emerging Markets Select Dividend Index. This fund is less exposed to the Financials (14.6%) compared to DEM, with top weighting assigned to Industrials (17.7%) and Telecom (15.4%).
Taiwan leads the country allocation with 22.6% weight, followed South Africa (10.5%) and by Turkey (9.6%). The fund holds 101 stocks and thus focuses on a smaller group of companies compared with DEM (293 holdings).
The underlying stocks are selected on the basis of dividend yield. The ETF currently charges 0.49% to the investors. The adviser to the fund has agreed to waive a part of its management fee to limit the expense ratio at this level through the end of December 2014.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.
Then when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros. In short, it's your steady flow of profitable ideas GUARANTEED to be worth your time. Get your free subscription to Profit from the Pros at: http://at.zacks.com/?id=7298
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
SOURCE Zacks Investment Research, Inc.
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
Apr. 25, 2015 11:00 AM EDT Reads: 2,071
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...
Apr. 25, 2015 11:00 AM EDT Reads: 2,019
SYS-CON Events announced today that Litmus Automation will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Litmus Automation’s vision is to provide a solution for companies that are in a rush to embrace the disruptive Internet of Things technology and leverage it for real business challenges. Litmus Automation simplifies the complexity of connected devices applications with Loop, a secure and scalable cloud platform.
Apr. 25, 2015 11:00 AM EDT Reads: 1,715
In 2015, 4.9 billion connected "things" will be in use. By 2020, Gartner forecasts this amount to be 25 billion, a 410 percent increase in just five years. How will businesses handle this rapid growth of data? Hadoop will continue to improve its technology to meet business demands, by enabling businesses to access/analyze data in real time, when and where they need it. Cloudera's Chief Technologist, Eli Collins, will discuss how Big Data is keeping up with today's data demands and how in the future, data and analytics will be pervasive, embedded into every workflow, application and infra...
Apr. 25, 2015 11:00 AM EDT Reads: 1,416
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, will provide some practical insights on what, how and why when implementing "software-defined" in the datacenter.
Apr. 25, 2015 11:00 AM EDT Reads: 1,598
So I guess we’ve officially entered a new era of lean and mean. I say this with the announcement of Ubuntu Snappy Core, “designed for lightweight cloud container hosts running Docker and for smart devices,” according to Canonical. “Snappy Ubuntu Core is the smallest Ubuntu available, designed for security and efficiency in devices or on the cloud.” This first version of Snappy Ubuntu Core features secure app containment and Docker 1.6 (1.5 in main release), is available on public clouds, and for ARM and x86 devices on several IoT boards. It’s a Trend! This announcement comes just as...
Apr. 25, 2015 11:00 AM EDT Reads: 1,354
SYS-CON Media announced today that @ThingsExpo Blog launched with 7,788 original stories. @ThingsExpo Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @ThingsExpo Blog can be bookmarked. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago.
Apr. 25, 2015 11:00 AM EDT Reads: 2,493
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on Twitter at @MicroservicesE
Apr. 25, 2015 11:00 AM EDT Reads: 2,064
SYS-CON Events announced today that Vicom Computer Services, Inc., a provider of technology and service solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. They are located at booth #427. Vicom Computer Services, Inc. is a progressive leader in the technology industry for over 30 years. Headquartered in the NY Metropolitan area. Vicom provides products and services based on today’s requirements around Unified Networks, Cloud Computing strategies, Virtualization around Software defined Data Ce...
Apr. 25, 2015 10:30 AM EDT Reads: 1,717
SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy. Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Raspberry Pi, BeagleBone, Spark and Intel Edison. You will also get an overview of cloud technologies s...
Apr. 25, 2015 10:15 AM EDT Reads: 2,984
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch of Docker's initial release in March of 2013, interest was revved up several notches. Then late last...
Apr. 25, 2015 10:00 AM EDT Reads: 2,822
WebRTC is an up-and-coming standard that enables real-time voice and video to be directly embedded into browsers making the browser a primary user interface for communications and collaboration. WebRTC runs in a number of browsers today and is currently supported in over a billion installed browsers globally, across a range of platform OS and devices. Today, organizations that choose to deploy WebRTC applications and use a host machine that supports audio through USB or Bluetooth can use Plantronics products to connect and transit or receive the audio associated with the WebRTC session.
Apr. 25, 2015 10:00 AM EDT Reads: 1,875
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, will discuss how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at the same time reduce Time to Market (TTM) by using plug and play capabilities offered by a robust I...
Apr. 25, 2015 10:00 AM EDT Reads: 1,959
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic strategies that utility/cloud computing provides. Whether public, private, or in a hybrid form, clo...
Apr. 25, 2015 10:00 AM EDT Reads: 4,155
IoT is still a vague buzzword for many people. In his session at @ThingsExpo, Mike Kavis, Vice President & Principal Cloud Architect at Cloud Technology Partners, discussed the business value of IoT that goes far beyond the general public's perception that IoT is all about wearables and home consumer services. He also discussed how IoT is perceived by investors and how venture capitalist access this space. Other topics discussed were barriers to success, what is new, what is old, and what the future may hold. Mike Kavis is Vice President & Principal Cloud Architect at Cloud Technology Pa...
Apr. 25, 2015 10:00 AM EDT Reads: 6,174
@ThingsExpo has been named the Top 5 Most Influential Internet of Things Brand by Onalytica in the ‘The Internet of Things Landscape 2015: Top 100 Individuals and Brands.' Onalytica analyzed Twitter conversations around the #IoT debate to uncover the most influential brands and individuals driving the conversation. Onalytica captured data from 56,224 users. The PageRank based methodology they use to extract influencers on a particular topic (tweets mentioning #InternetofThings or #IoT in this case) takes into account the number and quality of contextual references that a user receives.
Apr. 25, 2015 10:00 AM EDT Reads: 1,989
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? Join this panel of experts as they peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud environment, and we must architect and code accordingly. At the very least, you’ll have no problem filling in your buzzword bingo cards.
Apr. 25, 2015 10:00 AM EDT Reads: 2,191
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are configurable to any form factor or custom configuration. AIC leads the industry with nearly 20 years of ...
Apr. 25, 2015 10:00 AM EDT Reads: 4,976
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications Unified Communications Suite gives CSPs the capability to do just that. In addition, its integration ...
Apr. 25, 2015 09:30 AM EDT Reads: 4,343
SYS-CON Events announced today that Creative Business Solutions will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Creative Business Solutions is the top stocking authorized HP Renew Distributor in the U.S. Based out of Long Island, NY, Creative Business Solutions offers a one-stop shop for a diverse range of products including Proliant, Blade and Industry Standard Servers, Networking, Server Options and Care Packs. As a trusted supplier, CBS guarantees quality controlled stock levels thanks to an Auto...
Apr. 25, 2015 09:15 AM EDT Reads: 4,346