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Oppenheimer Adds International Ultra Dividend ETF

September 14, 2018 4:53 pm
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Oppenheimer Adds International Ultra Dividend ETF

The Oppenheimer Ultra Dividend Revenue ETF (NYSE:RDIV), one of this year's best-performing dividend exchange traded funds, has an international equivalent.

Oppenheimer introduced the Oppenheimer International Ultra Dividend Revenue ETF (NYSE:RIDV) on Thursday.

What Happened

The new RIDV follows the FTSE Custom Developed ex US Ultra Div Rev Net Index, a collection of the highest-yielding securities from the widely followed FTSE Developed Markets Index. Among other Oppenheimer ETFs, RDIV, RIDV's domestic cousin, made the concept of weighting stocks by top-line revenue, not market capitalization, more accessible to investors.

The new RIDV uses a revenue-weighted methodology that can help investors steer clear of richly valued stocks.

Why It's Important

RIDV is the third member of Oppenheimer's ultra dividend suite. In addition to RDIV and the new RIDV, the firm also offers the Oppenheimer Emerging Markets Ultra Dividend Revenue ETF (NYSE:REDV).

Oppenheimer's ultra dividend ETFs “offer high income potential by targeting high-yielding securities, increased value orientation through the use of the firm's proprietary revenue weighting methodology and greater opportunistic yield,” according to the issuer.

The new RIDV holds 201 stocks. Nineteen developed markets are represented in the new ETF, with the U.K. and France combining for 37.5 percent of the new ETF's geographic exposure. Germany and Italy, the Eurozone's largest and third-largest economies, respectively, combine for 23.5 percent of RIDV's weight.

What's Next

Dividends are growing in markets outside the U.S., including Europe, which could be supportive of RIDV.

In the second quarter, European dividend growth “was the strongest since the second quarter of 2015, with European companies paying a record $176.5 billion, an increase of 18.7 percent year-on-year, as higher corporate profits in 2017 flowed into dividends,” according to CNBC.

At the sector level, the new RIDV is top-heavy, with the financial services and energy sectors combining for 63 percent of the new ETF's roster, giving the new fund the feel of a value ETF. The consumer discretionary and telecom sectors combine for 15.7 percent of RIDV's weight.

RIDV's annual fee is 0.42 percent, or $42 on a $10,000 investment.

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