International equities have garnered plenty of positive attention this year. But the asset class isn’t immune to the broader market uncertainty caused by U.S. trade policy.
That’s confirmed by the widely followed MSCI EAFE Index being down 4.08% for the week ending April 10 and nearly 7% over the past month. Those data points could be indications that — as is the case with domestic equities — investors could be well-served by establishing defensive postures with foreign stocks. Enter the WisdomTree International High Dividend Fund (DTH ).
High dividend strategies and defense don’t always intersect. But when they do — as is the case with DTH — the results can be compelling. On a YTD basis, the WisdomTree ETF is easily outpacing the MSCI EFA Index while trouncing the S&P 500. And it’s doing so with significantly less annualized volatility than those benchmarks. That is to say DTH has credibility as a defensive idea.
Drilling Down on DTH
DTH tracks the WisdomTree International High Dividend Index. And as its name implies, a high dividend ETF. But its 30-day SEC yield of 4.02% is by no means alarming. That implies the fund’s holdings aren’t burdened by their payout obligations. And they may even have the capacity to gradually grow those dividends over time. Avoiding dividend offenders is integral to DTH’s defensive capabilities.
“Our initial expectation of DTH would be for the most defensively oriented construction, meaning that it could lag in up markets (true in 2017, 2019, 2021 and 2023) and outperform in rougher markets (not true in 2020, but true in 2022). 2025 YTD has seen DTH delivering relative outperformance, signifying that ‘value’ and ‘defensive’ types of allocations may be particularly in favor,” noted Christopher Gannatti, global head of research at WisdomTree.
As is the case with many high dividend ETFs, including domestic funds, DTH features a small weight to technology stocks. That’s a plus at a time when the sector is vulnerable to tariff shocks. Conversely, DTH devotes 27.39% of its weight to financials. That sector is driven the fund’s impressive start to 2025.
“Financials as strong performers in developed international equities is a primary factor explaining DTH’s stronger start to 2025 and relative outperformance so far in a tougher market environment,” added Gannatti.
Of course, DTH isn’t perfect. In addition to its large weight to financial stocks, it features hefty allocations to some other slow-growth sectors. That could weigh on returns in strong bull markets. But in the current environment, DTH’s boring-is-beautiful approach could be advantageous for equity income investors.
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