ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. The Responsible Investing Channel
  2. Contrarian Call: RDMX Possible Winner in 2023
The Responsible Investing Channel
Share

Contrarian Call: RDMX Possible Winner in 2023

Tom LydonDec 12, 2022
2022-12-12

Advisors and investors have long been vexed by ex-U.S. developed markets stocks and the related exchange traded funds. Those assets have long underperformed U.S. peers.

That long run of slack performance is enough to tempt market participants. Add in the fact that many international markets trade at steep discounts relative to the U.S., and that temptation only increases. But those factors also increase frustration.

Still, some market observers are bullish on international developed market equities for 2023, indicating there could be opportunities with ETFs such as the SPDR Bloomberg SASB Developed Markets Ex US ESG Select ETF (RDMX A-). RDMX could be seen as a contrarian idea, but there are reasons to believe developed markets equities can find some momentum next year. These reasons include RDMX’s quality purview and the shorter duration of international stocks.

“Another way we have been defining quality stocks is focusing on stocks with more immediate cash flows, rather than cash flows in the distant future: short duration stocks. These stocks have outperformed since rates bottomed in 2020. They also outperformed in 2022 when the market was falling and in the fourth quarter when it rebounded. The easiest way to find them? Use the price-to-free-cash-flow ratio to sort stocks: the lower the price to free cash flow, the higher the quality,” according to Charles Schwab research.

RDMX has other tailwinds that may be supportive of upside in 2023. Those include impressive dividend traits, lower price-to-cash-flow ratios, and recent outperformance despite the strong U.S. dollar. Plus, earnings growth in other developed markets is expected to outpace that of the U.S. in 2023.

“Earnings growth is also stronger outside the United States and is expected by analysts to remain so in 2023. The year-over-year earnings growth for S&P 500 companies in the recently reported third quarter was 4.1%, compared to 30.5% for companies in Europe’s STOXX 600 Index. Combined with lower valuations, this has helped international stocks outperform, which may become more pronounced with a pause or reversal in the sharp rise of the dollar that characterized much of 2022,” added Schwab.

RDMX, which turns a year old next month, sports a 30-day SEC yield of 3%. That’s not alarmingly high, but it’s higher than what investors find with U.S. benchmarks. Those dividends could be supportive of RDMX upside in the new year.

“More importantly, high-dividend stocks outperformed both when the market was going down during the first three quarters of the year and when it was rising during the fourth-quarter rally. There can be no guarantees, but investors may be able to navigate 2023 by sticking with what has been working in both up and down markets during 2022,” concluded Schwab.

For more news, information, and analysis, visit the ESG Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X