EDIV ETF: 70% in Five Countries – Your Portfolio's Ultimate Single Point of Failure Crash

The SPDR S&P Emerging Markets Dividend ETF (EDIV), managed by State Street Global Advisors, has been assigned a sell rating by analyst Ben Holden-Crowther due to its poor long-term prospects and high concentration risk. Since its inception, the EDIV has underperformed traditional market-cap weighted emerging market funds, achieving less than 9% of the total return of the S&P 500, which is a significant underperformance. The ETF's yield-weighted approach selects 100 companies from the universe of dividend-paying emerging market equities, resulting in excessive concentration in just five countries, which account for 70% of its assets, making it a high-risk investment. Furthermore, the EDIV has a high expense ratio, which, combined with better high-yield opportunities elsewhere, makes it an unattractive investment option. As of the article's publication, analyst Ben Holden-Crowther, who has a Buffett and Munger-inspired approach to investing, emphasized that the EDIV's strategy has historically offered relatively poor long-term results, making it a sell-rated ETF.