Super-Size Your Global Dividends

01/03/2014 7:00 am EST


Carlton Delfeld

Editor, The La Jolla Letter and Pacific Gains

Don't forget to look overseas in putting together your dividend-rich portfolio, explains global specialist and editor of Capital Gains, Carl Delfeld. Here, he looks at three ways to gain global income.

Take Asia, for example. Last year, companies in the MSCI Asia-Pacific index paid out almost as many dividends as those in the S&P 500 (SPX).

And, according to Matthews' Funds, from 2002-2009, Asian companies grew dividends at a compound annual growth rate of 18%, compared to 10% for the S&P 500. Japan, China, Australia, Taiwan, and Hong Kong are the biggest dividend payers in the region.

Meanwhile, exchange-traded funds have made putting together a low-cost basket of dividend companies a snap. Here is a global triple-play that will super-size your dividends.

First, look at the brand new Global X Super Dividend ETF (SDIV), which tracks the performance of 100 equally-weighted companies that rank among the highest dividend-yielding equity securities in the world.

Global X Super Dividend provides good diversification, with exposure to REITs (22%), consumer discretionary stocks (16%), telecommunications (16%), financial services (10%), utilities (8%), banks (5%), consumer staples (5%), energy (5%), industrials (5%), insurance (3%), technology (3%), and health care (2%).

About 32% of the companies in the basket are based in the US, 24% in Australia, 10% in Great Britain, 6% in Canada, and 4% in Singapore, among others.

Second, add to the mix, one of my long-time favorite ETFs, the PowerShares International Dividend Achievers (PID).

To get into this exclusive basket, companies have to have a record of increasing dividends for five consecutive years. The United Kingdom and Canada make up 50% of its holdings with the US at only 6%.

Finally, to get more Asia and emerging market exposure, add a dash of the WisdomTree Emerging Market Equity Income ETF (DEM).

DEM has 20% exposure to Taiwan, as well as 20% to Brazil. Telecom companies make up a majority of the companies in the basket and you can expect it to distribute dividend income in the area of 5% annually.

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