Five International Dividend ETFs Your Broker Forgot to Mention
Dividends are all the rage these days. As they should be. The evidence is clear that dividends account for a substantial percentage of a portfolio’s returns over time meaning dividend stocks simply cannot be ignored in the quest to build a proper portfolio. And hey, there’s nothing like free money.
While many investors are wise to the benefits of dividends, many may not recognize the advantages of international dividend-paying stocks. However, those advantages are clear. Many global companies pay higher dividends and offer higher yields than their U.S.-based rivals in the same sectors.
For those that aren’t in the mood to go on a dividend hunting vacation, there are plenty of viable options in the ETF universe to get you the global dividend exposure you crave. Here are five international dividend ETFs your broker probably forgot to tell you about.
Guggenheim S&P Global Dividend Opportunities Index ETF (NYSE: LVL):
With $41.6 million in assets under management, the Guggenheim S&P Global Dividend Opportunities Index ETF isn’t truly international in its approach as the U.S. receives a country weight of more than 23%. However, LVL does a good job of spreading out the weights of its 100 holdings as none receive an allocation of more than 3.43%. Utilities, telecoms and financials represent 73% of the sector weight. Current yield: 6%.
iShares Dow Jones International Dividend Select Index Fund (NYSE: IDV):
Like LVL, IDV has been around since June 2007 and the iShares offering has become one of the dominant global dividend ETFs in that time, amassing almost $598 million in AUM. Australia an the U.K. account for 43% of IDV’s country weight. The ETF holds 103 stocks with financials, oil, utilities, telecom and consumer services all getting double digit allocations. Current yield: 5.08%.
PowerShares International Dividend Achievers Portfolio (NYSE: PID):
PID just celebrated its sixth birthday and since its September 2005 debut, this ETF has flown under the radar of the mainstream financial press, but not smart investors. That much is highlighted by PID’s $520.4 million in AUM. PID does feature a 6.8% weight to the U.S., but Canada and the U.K. account for over 45% of the ETF’s weight. While the bulk of PID’s 64 holdings are concentrated in the large-cap universe, the ETF does mix some decent exposure mid-cap value and growth stocks. Current yield: 3.88%.
WisdomTree Global ex-US Growth Fund (NYSE: DNL):
WisdomTree is perhaps the top purveyor of international dividend ETFs and the WisdomTree Global ex-US Growth Fund is proof positive of that notion. DNL has fallen dramatically in recent months, the byproduct of 49% exposure to materials and energy stocks. On the other hand, that means this ETF is primed to soar if risk on comes back into style. Royal Dutch Shell (NYSE: RDS-A), Europe’s largest oil company, accounts for 12% of the ETF’s weight. Current yield: 3.32%.
WisdomTree Middle East Dividend ETF (NYSE: GULF):
Thinly traded with three sectors (financials, telecom and utilities) accounting for 94% of its weight, the WisdomTree Middle East Dividend ETF is perhaps a victim of the geography it tracks. With emerging markets still struggling, investors remain skeptical of riskier frontier markets, which is what GULF offers exposure. The ETF could be a buy above $15. Current yield: 5.78%.
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