S&P Rates 2 Global Dividend ETFs Marketweight
Dividends and yields on developed market equities outside the U.S. have long been more impressive than comparable U.S. fare and it is no surprise to see developed Europe leading. Faltering equity prices amid the Eurozone's sovereign debt crisis have elevated yields, but European equities and select corresponding ETFs have bounced back in recent weeks.
In a research note published on Wednesday, S&P Capital IQ encourages investors "to look inside an ETF to see what countries and sectors it is exposed to and the quality of the stocks in its holdings." S&P Capital IQ rates two multi-country ETFs Market-weight in the note.
Wednesday's note follows research published earlier this week in which S&P Capital IQ highlighted several ETFs tracking developed and emerging economies as valid yield plays. In that note, S&P rated well-known ETFs such as the iShares MSCI Germany Index Fund (NYSE: EWG), the iShares MSCI South Africa Index Fund (NYSE: EZA), the iShares Switzerland Index Fund (NYSE: EWL) and the iShares MSCI Turkey Investable Market Index Fund (NYSE: TUR) Market-weight.
In its Wednesday note, S&P rates the SPDR S&P International Dividend ETF (NYSE: DWX) Market-weight. The $980.1 million fund charges 0.45 percent per year and sports a dividend yield of 7.21 percent. At the sector level, telecommunications names dominate DWX with an allocation of 24.5 percent. Financials and utilities garner weights of 18.1 and 17.7 percent, respectively.
DWX offers exposure to 26 developed and developing markets, but Spain and Australia combine for about 30 percent of the fund's weight. France, with an allocation of almost 10.8 percent, is the only other country to receive a double-digit weight. Turkey is DWX's largest emerging market weight at almost 3.4 percent.
Year-to-date, DWX is up 1.9 percent, but the fund has jumped 6.5 percent in the past month.
S&P also rates the iShares Dow Jones International Select Dividend Index Fund (NYSE: IDV) Marketweight. That ETF has $1.1 billion in AUM and charges 0.5 percent per year. There are other significant differences between IDV and DWX.
At the sector level, IDV is more diverse, offering double-digit weights to the following five sectors: Financials, consumer staples, utilities, oil and gas and telecommunications. IDV offers exposure to 25 countries, with Australia and the U.K. combining for over 38 percent. Aside from a scant 0.73 allocation to China, IDV's country weights are entirely developed markets.
IDV has a 30-day SEC yield of 4.98 percent and trailing 12-month yield of 5.15 percent, according to iShares data. The ETF is up almost 11 percent year-to-date and 4.6 percent in the past month.
For more on income options with international ETFs, click here.
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