Index giant S&P Dow Jones Indices has added to its expanding equity income offering with the launch of the S&P Brazil Dividend Indices, a new family of indices tracking the performance of dividend-paying securities focused on the Brazilian market.
Thew newly launched S&P Brazil Dividend Indices track the performance of dividend-paying companies in Brazil.
The index family is composed of three different indices offering a range of exposures from dividend stability to pure high yield to small- and mid-cap stocks.
They have been designed to be suitable both as underlyings for index-linked investment products such as exchange-traded funds (ETFs) and as benchmarks for actively managed funds.
Vinit Srivastava, director of strategy indices at S&P Dow Jones Indices, said: “The concept of dividends in emerging markets has been growing in popularity in recent years as growth in those markets has slowed.”
He added: “Over the past 15 years, dividends have increasingly contributed to Brazil’s broad market returns as measured by the S&P Brazil Broad Market Indices (BMI), accounting for over a quarter of the market’s total returns during that period. The S&P Brazil Dividend Indices are some of the first dividend-focused indices in the Brazilian market that specifically look at stocks’ dividends as a way to capture growth and maximize yield.”
The primary universe for each of the three indices is the market capitalisation-weighted S&P Brazil BMI. This index covers all publicly listed equities domiciled in Brazil with float-adjusted market values of $100 million or more and annual dollar value traded of at least $ 50 million
The three new indices are:
S&P Dividend Aristocrats Brasil Index
This index tracks the performance of the 30 S&P Brazil BMI constituents that have consistently increased or maintained stable dividends every year for at least three years.
S&P Brazil Dividend Opportunities Index
This index measures the performance of 40 of the highest yielding constituents of the S&P Brazil BMI that meet size, liquidity and profitability criteria.
S&P Brazil Dividend Opportunities SmallMidCap Index
This index is designed to measure the performance of 25 of the highest yielding small-cap and mid-cap constituents of the S&P Brazil BMI that meet size, liquidity and profitability criteria.
As yet, there no ETFs specifically providing access to high-yielding Brazilian stocks. Investor looking for immediate equity income exposure to Brazil could consider the EGShares Brazil Infrastructure ETF (BRXX) listed on the NYSE Arca. As of the 30 June 2013, the fund’s underlying index, the Indxx Brazil Infrastructure Index, which comprises 30 leading Brazilian infrastructure companies, has a yield of 4.31%.