International Revenue-Weighted ETFs Are Here

Oppenheimer, the exchange traded funds issuer behind an extensive lineup of revenue-weighted funds, added to that stable Thursday with the debuts of two international dividend products.

The Oppenheimer International Ultra Dividend Revenue ETF RIDV and the Oppenheimer Emerging Markets Ultra Dividend Revenue ETF REDV are the issuer's newest funds.

What Happened

The idea of building an index where the components are weighted by top-line revenue, not market value, isn't new. In fact, long-running historical data prove the validity of the concept, at least with domestic equities.

Revenue weighting is the methodology that serves as the backstop for popular Oppenheimer ETFs, including the Oppenheimer Ultra Dividend Revenue ETF RDIV, Oppenheimer Emerging Markets ETF REEM, Oppenheimer ESG Revenue ETF ESGL, and Oppenheimer Global ESG Revenue ETF ESGF, among others.

Weighting stocks by revenue can help reduce exposure to richly valued names while offering the potential to outperform dedicated growth and value funds.

Why It's Important

The Oppenheimer International Ultra Dividend Revenue ETF follows the FTSE Custom Developed ex US Ultra Div Rev Net Index, a collection of the highest-yielding stocks from the widely followed FTSE Developed Ex US Index. That new ETF holds 200 stocks.

RIDV is significantly overweight the U.K., France and Germany relative to the FTSE Developed Ex US Index. The new ETF devotes a combined 52.8 percent of its weight to those countries compared to just over 33 percent in the FTSE Developed Ex US Index.

The new ETF is top-heavy at the sector level with financial services and energy combing for two-thirds of the fund's weight. RIDV charges 0.42 percent per year, or $42 on a $10,000 investment.

What's Next

The Oppenheimer Emerging Markets Ultra Dividend Revenue ETF follows the FTSE Custom Emerging Ultra Dividend Revenue Net Index, an offshoot of the popular FTSE Emerging Markets Index. REDV holds 101 stocks.

China and Russia are the new ETF's top two country exposures, combing for 37.4 percent. Russia represents 14.4 percent of REDV's weight compared to just 4 percent in the FTSE Emerging Markets Index.

Utilities and financial services stocks combine for half of REDV's sector weight. The new ETF has an annual fee of 0.46 percent.

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Getting In The Know

Posted In: Long IdeasDividendsNew ETFsEmerging Market ETFsTop StoriesTrading IdeasETFs

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