ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • 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 Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF Building Blocks Channel
  2. Where to Head for Better Global Dividend Yields
ETF Building Blocks Channel
Share

Where to Head for Better Global Dividend Yields

Tom LydonApr 12, 2022
2022-04-12

Ex-U.S. developed markets equities and the related exchange traded funds typically boast higher dividend yields than comparable U.S.-focused offerings, but knowing that is only half the battle for income investors seeking international diversification.

Investors should be selective with their approaches to international dividend-payers and look for a combination of robust yields, potential for lower volatility and payout growth opportunities. The ALPS International Sector Dividend Dogs ETF (IDOG B-) is an example of an ETF that checks those boxes.

IDOG, which is almost nine years old, follows the S-Network International Sector Dividend Dogs Index. That benchmark lives up to the standard of offering a higher dividend than rival U.S. fare.

“The difference in yields becomes more obvious when looking at dividend indexes. The S-Network Sector Dividend Dogs Index (SDOGX)—a domestic equity income index—has a five-year average yield of 4.5% compared to the S-Network International Sector Dividend Dogs Index (IDOGX)—a developed international equity income index—which has a five-year average yield of 5.2%. The countries currently represented in IDOGX all have higher average dividend yields compared to the U.S.,” notes Alerian analyst Roxanna Islam.

IDOG’s components and sector exposures are equally weighted, reducing concentration risk at the holdings and sector levels. The ETF’s geographic exposures are not equally weighted. In this case, that’s just fine because some ex-U.S. developed markets are more known for dividends than others.

On the yield front, IDOG allocates over 30% of its combined weight to the U.K. and Australia. An almost 19% allocation to Japanese stocks indicates that IDOG has some leverage to sources of quality dividend growth.

IDOG’s methodology “reduces concentration to sectors like financials and healthcare, which are heavily weighted in broader international dividend indexes. The strategy is constructed to pick stocks with the highest dividend yields (assumed to be the cheapest in their sector) with the assumption that prices will appreciate throughout the year and revert to the mean,” adds Islam.

IDOG currently yields 3.55%, or 127 basis points in excess of the MSCI EAFE Index. Plus, IDOG is trading higher on a year-to-date basis while the MSCI EAFE Index is off 7.36%. That’s confirmation that dividends matter.

Other international developed market dividend ETFs include the FlexShares International Quality Dividend Dynamic Index Fund (IQDY B), the ProShares MSCI EAFE Dividend Growers ETF (EFAD B), and the SPDR S&P International Dividend ETF (DWX B).

For more news, information, and strategy, visit the ETF Building Blocks Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

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