International Dividend ETFs for Income
August 23rd 2011 at 8:57am by Tom Lydon
Investors’ search for yield has taken them across borders to dividend-themed exchange traded funds that target international stocks.
Non-U.S. companies that are paying dividends can help investors gain more than the 2% that the S&P 500 is yielding, reports Matthew Andrejczak for MarketWatch.
International stock ETFs that have a dividend yield can generate income and help spread out the risk of single-stock investing. They can also diversify currency exposure and give investors a chance to profit from a weaker U.S. dollar, according to the report.
International dividend ETFs have taken a hit along with most equities funds during the recent market pullback. [Emerging Market ETFs for Yield]
“In this kind of choppy market, dividends are a huge pillar of support for a diversified portfolio,” said Alec Young, international equity strategist at Standard & Poor’s Equity Research, in the article.
The overall appeal of buying a dividend stock is that it can help cushion any decline in stock price and gives the chance for capital appreciation with a steady income stream. [How to Easily Find High Yielding ETFs]
One example of an international dividend ETF is First Trust STOXX European Select Dividend Fund (NYSEArca:FDD), which yields 5% and covers 30 companies in Europe.
Other broad-based international dividend ETFs:
- iShares Dow Jones International Select Dividend Index (NYSEArca: IDV) yields 4.8%; Holds 103 companies.
- SPDR S&P International Dividend (NYSEArca: DWX) yields 5.6%; gives exposure to 100 of the highest performing dividend yielding common stocks.
- WisdomTree Dividend ex-Financials Fund (NYSEArca: DOO) yields 5.2%; selects the 10 highest dividend yielding companies within each sector; weights heavily in telecom and consumer staples.
iShares Dow Jones International Select Dividend Index
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.