ETF Spotlight: SPDR International Dividend

June 12th at 8:58am by Tom Lydon

ETF Spotlight on SPDR S&P International Dividend ETF (NYSEArca: DWX), part of an ongoing series.

Assets: $769.3 million.

Objective: The SPDR S&P International Dividend ETF tries to reflect the performance of the S&P International Dividend Opportunities Index, which is comprised of the 100 highest dividend yielding international stocks and ADRs.

Holdings: Top holdings include: Admiral Group 4.0%, Marine Harvest Asa 3.6%, National Grid 3.4%, Komercni Banka 3.4% and Prosiebensat1 Medi 3.4%.

What You Should Know:

  • State Street Global Adivsors sponsors the fund.
  • DWX has an expense ratio of 0.45%.
  • The fund holds 127 securities and the top 10 make up 33.9% of the overall portfolio.
  • Sector allocations include: telecommunication services 21.6%, financials 20.9%, utilities 17.8%, consumer discretionary 14.1%, materials 7.4% industrials 7.1%, consumer staples 7.0%, health care 1.7%, energy 1.4%, information technology 0.2%.
  • Country allocations include: U.K. 12.7%, Australia 12.3%, Germany 12.0%, Netherlands 7.8%, Italy 6.1%, Czech Republic 5.3%, Singapore 5.1%, France 5.1%, China 5.1%, Norway 5.0%, Spain 4.6%, Israel 3.8%, South Africa 3.4%, Turkey 2.8%, Sweden 2.7%, Portugal 2.4%, Finland 1.6% and Canada 1.5%.
  • The ETF has a dividend yield of 7.07%.
  • The fund is up 4.9% over the last week, down 12.7% over the past three months and down 5.8% year-to-date.
  • “Investors in SPDR S&P International Dividend DWX could be forgiven for thinking that it’s safer than a vanilla international stock market fund,” according to Morningstar analyst Samuel Lee. “Dividends, after all, are associated with big, mature companies.”
  • “By trailing 12-month yield, the stock looks cheap and safe; in reality, it’s neither,” Lee cautioned. “The index tries to mitigate such issues by screening stocks for profitability and earnings growth. On the other hand, the index’s size cutoff doesn’t exclude smaller funds, so this ETF straddles the mid- and large-cap categories.”
  • “This index exchange-traded fund boasts a dramatic 7.3% 12-month yield, one of the highest among foreign mutual funds and ETFs,” writes Laura Lallos, senior mutual fund analyst, for Morningstar. “The fund is also quite risky, however, as its yield screens don’t always exclude distressed companies with plunging prices that push yield up.”

The Latest News:

  • While U.S. stocks produce a paltry 2.25% yield, many foreign stock markets generate more than double that of U.S. equities, reports Jack Hough for The Wall Street Journal.
  • For instance, New Zealand has an average 5.61% dividend yield, Poland 5.58%, Australia 5.16% and Norway 4.95%.
  • “U.S. investors have been taught to believe that you get either growth or income,” Brad Kinkelaar, co-manager of the Pimco EqS Dividend fund, said in the article. “In international markets, investors still demand both.” [The Case for Emerging Market Dividend ETFs]

SPDR S&P International Dividend ETF

For past stories in this series, visit our ETF Spotlight category.

Max Chen 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.

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