I've noticed that dividend yield of Japanese ETFs following MSCI or FTSE emerging markets indices is 0% (e.g. 1681), while US ETFs which follow same indices have 1-2% yield (here).
Also for example, iShares ETF 1658 which follows MSCI has div. yield 0%, while their JDR 1582 following the very same index had yield 1.05%.
There is no such discrepancy for ETFs following developed market indices (taking into account the fact that Japanese ETF follow ex-Japan indices).
So what's going on here? Where is the money?
Is it somehow related to yen exchange rate fluctuations?
I think it is not due to the dividend reinvestment, because, unlike mutual funds, ETFs don't/can't do that.
Dividends of EM stocks ETF
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fools_gold
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Re: Dividends of EM stocks ETF
1658 is new so that's probably why there's no dividend information out yet. I'm not sure what is happening with 1681. Usually if a fund tracks an index which includes the dividend, then you should see the 配当込み label somewhere in the prospectus. I can't find it. Here's a blog article looking into the performance of 1681:
http://valavg.com/why-nikkoam-etf-is-wo ... rformance/
1658 looks like a good bet because you have to pay the 10% US tax on dividends with JDRs.
http://valavg.com/why-nikkoam-etf-is-wo ... rformance/
1658 looks like a good bet because you have to pay the 10% US tax on dividends with JDRs.
Re: Dividends of EM stocks ETF
Thanks for the reply.
There is 配当込み in the prospectus (p.15), but as I I understand it doesn't mean that fund reinvests dividends. For example, their other fund, 1680, also follows 配当込み index, but pays out dividends. I believe all Japanese funds I've looked follow 配当込み indices, but not all of them reinvest dividends. Furthermore, I believe, Japanese ETF cannot reinvest dividends internally.
I've looked at the article, but it is too much Japanese for me, so I read only a conclusion. As I understood, the author claims that the funds underperforms and advises to compare not only at fees, but the performance as well (that might be a good advise, because so far I was not thoroughly comparing performance of the funds following same indices). However, the author did not know why the fund underperforms (I think he made some assumptions that it might be due to the fact that 1681 invests in futures).
I guess it leaves only 1658. I generally prefer MF to ETF because of dividend reinvestment thing, but for EM the difference in fees is too huge to ignore.
I've also just found out that on Nov 17 Rakuten created a new low cost MF with Vanguard, but I guess it is only a wrapper, so it would incur 10% tax on dividends.
There is 配当込み in the prospectus (p.15), but as I I understand it doesn't mean that fund reinvests dividends. For example, their other fund, 1680, also follows 配当込み index, but pays out dividends. I believe all Japanese funds I've looked follow 配当込み indices, but not all of them reinvest dividends. Furthermore, I believe, Japanese ETF cannot reinvest dividends internally.
I've looked at the article, but it is too much Japanese for me, so I read only a conclusion. As I understood, the author claims that the funds underperforms and advises to compare not only at fees, but the performance as well (that might be a good advise, because so far I was not thoroughly comparing performance of the funds following same indices). However, the author did not know why the fund underperforms (I think he made some assumptions that it might be due to the fact that 1681 invests in futures).
I guess it leaves only 1658. I generally prefer MF to ETF because of dividend reinvestment thing, but for EM the difference in fees is too huge to ignore.
I've also just found out that on Nov 17 Rakuten created a new low cost MF with Vanguard, but I guess it is only a wrapper, so it would incur 10% tax on dividends.