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Time to Invest in Taiwan? Maybe, Maybe Not


It sure feels like Taiwan has been flying under the radar as of late.

iShares Emerging Markets Dividend Index Fund (NYSEARCA:DVYE): Based purely on the fact that emerging markets firms are becoming better dividend payers, the iShares Emerging Markets Dividend Index Fund is alluring.

On that note, Taiwan has long been one of the preferred destinations in the developing world for income investors so it is not surprising to see the country dominate DVYE with a weight of over 22%. The fund debuted in February and has thus far accumulated almost $49 million in assets under management. DVYE's 30-day SEC yield is 5.11%.

Income investors seeking Taiwan exposure should also consider the WisdomTree Emerging Markets Equity Income Fund (NYSE:DEM) and the SPDR S&P Emerging Markets Dividend ETF (NYSEARCA:EDIV).

WisdomTree Emerging Markets SmallCap Dividend Fund (NYSEARCA:DGS): The WisdomTree Emerging Markets SmallCap Dividend Fund's name might imply a level of risk that some investors do not want to take because it combines emerging markets and small-caps. What is important to note, however, is that DGS devotes over a third of its weight to Taiwan and South Korea. Those are two of the least volatile emerging markets and that assertion is borne out in the statistics.

For example, the aforementioned iShares MSCI Taiwan Index Fund has been less volatile this year than VWO, FXI and the Market Vectors Indonesia ETF (NYSEARCA:IDX), just to name a few. DGS itself is also less volatile than all those funds, including EWT. The fund has 30-day SEC yield of 3.4%.

Index IQ Emerging Markets Mid Cap ETF (NYSEARCA:EMER): Unknown to many investors, the Index IQ Emerging Markets Mid Cap ETF has been a solid performer this year with a gain of over 11%. EMER is something of a dichotomy. At the sector level, financials and consumer discretionary names combine for over 42% of the fund's weight. That gives EMER a high-beta flair.

On the other hand, EMER is by no means ultra-risky because Taiwan and South Korea combine for nearly 41% of the ETF's country weight. Taiwan alone represents over a quarter of the fund's weight. Year-to-date and over the past 90 days, EMER has been a better bet than EWT.

Editor's Note: This content was originally published on by The ETF Professor.

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