A very distinct risk-off mood to the start of the week as investors and traders woke up to grim news...
3 ETFs for Global Income Growth
09/10/2018 5:00 am EST
Global dividends reached record levels in the second quarter of 2018, reflecting strong earnings and economic growth, asserts Tony Daltorio, editor of Growth Stock Advisor.
One excellent option to consider among international dividend ETFs is the iShares International Select Dividend ETF (IDV). This ETF’s portfolio consists of companies taken from developed countries in Europe, Pacific, Asia and Canada. Securities must also meet requirements on dividend payout consistency and growth metrics, along with profitability and minimum liquidity levels.
The fund holdings are then weighted by dividend yield. The majority of the holdings seem to be in three sectors — drugs, oil, and financials. IDV is down 1.85% over the past year (due likely to a strong dollar), but does have a 4.64% 12-month yield.
Another good choice is the Legg Mason International Low Volatility High Dividend ETF (LVHI). The underlying index the ETF tracks seeks to provide more stable income through investments in stocks of profitable companies in developed markets outside of the U.S. with relatively high dividend yields or anticipated dividend yields and lower price and earnings volatility.
The fund also focuses on mitigating exposure to exchange-rate fluctuations between the dollar and other international currencies. This fund has exposure to drug companies, banks and oil companies. But it also owns telecom firms. LVHI is down 2.5% over the last year, but does have a 4.34% yield.
Finally, there is a fund I like because it excludes financial stocks — the WisdomTree International Dividend ex-Financials Fund (DOO). It is based on an index that includes high-dividend yielding international stocks outside the financial sector, which is subject to interest rate risk.
The fund has a lot of telecom and utility firms in the portfolio. The ETF is up 1.5% over the past year and has a dividend yield of 3.63%.
There are numerous other international dividend ETFs, of course. One common factor you will find is that a strong U.S. dollar (as we’ve had the past few months) will adversely affect the price of the stocks in the ETF. However, when the dollar inevitably turns the other direction, you will find a strong tailwind at your back — in other words, a good dividend yield and capital appreciation.
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