For over a decade, U.S. equities have dominated, but 2025 is shaping up to be a turning point. Several macro trends are converging to make international markets more attractive. As global markets regain momentum and investors seek both yield and diversification, funds like the ALPS International Sector Dividend Dogs ETF (IDOG ), are positioned to meet the moment.
IDOG tracks the S-Network International Sector Dividend Dogs Index (IDOGX). IDOG’s approach provides targeted exposure to companies known for their shareholder payouts, including firms in traditionally high-yield sectors such as energy, financials, and utilities. The fund currently allocates a significant portion of its assets to these income-generating areas, offering a balance that can help smooth returns during market turbulence.
Supportive Policy
Unlike traditional cap-weighted indexes that often become overly concentrated in certain sectors or countries, IDOG takes an equal-weighted approach.
Fiscal and monetary policies in Europe and other developed regions are increasingly growth-friendly, especially for value-oriented sectors like financials and industrials. IDOG avoids concentration in any one region or sector, making it a useful counterbalance to U.S.-centric portfolios.
A weakening U.S. dollar historically supports foreign equity returns for U.S. investors. This trend appears to be re-emerging in 2025, echoing patterns last seen in the early 2000s. Top holdings in IDOG include Japan Tobacco Inc, Singapore Telecommunications Ltd, Enel SpA and Imperial Brands.
Earnings Momentum
International developed markets are seeing stronger earnings growth forecasts, especially in sectors tied to infrastructure, defense, and energy. IDOG is already reflecting this strength. With a 17.80% year-to-date return (per YCharts), it is outpacing many of its peers. For comparison, the iShares MSCI EAFE ETF (EFA ) posted a 17.46% YTD return. While EFA delivers wide international exposure, it does not screen specifically for dividend yield, which can dilute income potential. IDOG stands out for its income-focused strategy.
Valuations remain attractive relative to U.S. markets, policy tailwinds are gaining strength and earnings momentum is shifting abroad. For those rethinking geographic exposure, international dividend strategies like IDOG may represent a strategic pivot.
VettaFi LLC (“VettaFi”) is the index provider for IDOG, for which it receives an index licensing fee. However, IDOG is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of IDOG.
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