EMDM: FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF
ETF Education Report: FIRST TRUST BLOOMBERG EMERGING MARKET DEMOCRACIES ETF (EMDM)
What this ETF is trying to do
The EMDM ETF is designed to track companies located in emerging market countries that are considered democracies. It holds a variety of different stocks to achieve this goal.
What the numbers show
When looking at an ETF, it is important to understand two different types of returns: price return (how much the share price changed) and total return (the share price change plus any cash distributions received).
Based on the data provided:
• Year-to-Date (YTD): The price return is approximately 37.99%, while the total return is approximately 39.16%.
• One-Year: The price return was approximately 49.86%, and the total return was approximately 55.15%.
• Three-Year: The price return was approximately 124.66%, and the total return was approximately 150.01%.
To give you an idea of how the price has moved, the estimated price from roughly one year ago was $28.85. The current price is $43.24.
Top Holdings
The following are some of the top holdings in this ETF. Please note that this is a partial list and holdings can change over time:
• SAMSUNG ELECTRONICS CO LTD (11.33%)
• SK HYNIX INC (6.77%)
• GRUPO MEXICO SAB DE CV CLASS B (4.14%)
• ANGLOGOLD ASHANTI PLC (2.37%)
• OTP BANK PLC (2.11%)
• PKO BANK POLSKI SA (2.00%)
• GOLD FIELDS LTD (1.76%)
• NASPERS LTD CLASS N (1.75%)
• HDFC BANK LTD (1.67%)
• ORLEN SA (1.65%)
Income and distribution explanation
This ETF pays out cash distributions to investors. The current distribution yield is approximately 2.69%. This means the cash paid out is about 2.69% of the current share price. Over the last 12 months, there were 3 distributions. The frequency of these payments is described as irregular or less frequent.
NAV erosion explanation
"NAV erosion" refers to a situation where the value of the underlying assets in the ETF decreases over time. It is important to distinguish between a falling share price and NAV erosion. In this case, the erosion-risk score is 100, which is labeled as "No price erosion detected." There is no severe erosion-risk flag for this ETF.
Pros
• The ETF has shown significant positive price returns over the one-year and three-year periods.
• The total return is higher than the price return, meaning distributions have added value to the overall performance.
Cons
• The distribution frequency is irregular, meaning investors cannot expect a steady, predictable schedule of cash payments.
Beginner takeaway
When studying EMDM, it is helpful to look at both the price movement and the total return. While the share price has grown, the total return shows that the cash distributions also contributed to the overall value. Always remember that a distribution yield tells you about cash payments, but it is not the same thing as your total return.
Top Holdings
Structured portfolio holdings supplied by the ETF data provider. These figures are not generated by the AI article.
| # | Holding | Ticker | Weight |
|---|---|---|---|
| 1 | n/a | n/a | 11.86% |
| 2 | SAMSUNG ELECTRONICS CO LTD | n/a | 11.33% |
| 3 | SK HYNIX INC | n/a | 6.77% |
| 4 | GRUPO MEXICO SAB DE CV CLASS B | n/a | 4.14% |
| 5 | n/a | n/a | 2.59% |
| 6 | ANGLOGOLD ASHANTI PLC | AU | 2.37% |
| 7 | OTP BANK PLC | n/a | 2.11% |
| 8 | PKO BANK POLSKI SA | n/a | 2.00% |
| 9 | GOLD FIELDS LTD | n/a | 1.76% |
| 10 | NASPERS LTD CLASS N | n/a | 1.75% |