Looking to invest abroad? With the U.S. facing an ever-more-complicated interest rate environment and stubborn inflation, it makes sense investors would want added foreign exposure with which they can diversify.
Before diving into international equities, however, investors may want to look at this key data point when considering foreign firms.
See more: Bull vs Bear: Will Rate Cuts Still Happen This Year?
That data point? Surprisingly, dividends stand out as a powerful source of data about foreign firms. Investors know dividends as a frequently reliable source of current income. But they can offer so much more than that. Not only can they boost current income or be invested, but dividends can provide a powerful signal.
When looking to international equities investing, dividends can help signal which firms have healthier outlooks than others. That applies to domestic dividend investing, too. But U.S. investors often lack the same amount of information about foreign markets as they have about domestic equities.
Strong or even growing dividends help indicate how a firm is doing, but they provide a data point that can be compared across very different markets.
International Equities Investing ETF IDOG
So, what kind of fund can investors use to lean into for such an approach? The ALPS International Sector Dividend Dogs ETF (IDOG ) could stand out. The strategy charges a 50 basis point fee. Through tracking its equal-weighted index, it picks the five firms with the highest dividend yield in each of the 11 GICS sectors. That produces a total of 50 holdings in which the ETF invests.
IDOG has returned 12.9% over the last one year — solid performance while also offering foreign diversification. The ETF significantly invests in Europe but also includes allocations to Japan and Australia.
For more news, information, and analysis, visit the ETF Building Blocks Channel.
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.
