ETF Spotlight on First Trust DJ Global Select Dividend (NYSEArca: FGD), part of a weekly series.
Assets: $59.8 million
Objective: Tracks the Dow Jones Global Select Dividend Index, an index of 100 developed-market stocks
Holdings: Top holdings include companies like Deutsche Telecom, Canadian Oil Sands, HMV Group and France Telecom.
What You Should Know
- To be considered for inclusion in the index, companies must pay a current dividend, have a current-year dividend-per-share ratio greater than or equal to its five-year average, have a five-year average payout ratio of less than or equal to 60% for European and U.S. companies and 80% for all others and have a minimum three month daily average trading volume of $3 million
- Stocks included are then weighted by their dividend yield
- North America, Europe and Asia make up the bulk of this fund: Australia is 19%, the United States is 16.9%, the United Kingdom is 12.2% and Canada is 10.1%; France, Hong Kong, Italy, Singapore and others appear in smaller amounts
- The top sectors are utilities, 19.1%; telecom, 17.2%; industrials, 15.6%; and financials, 13.9%
- Rebalancing occurs once a year, in December
The Latest News
- FGD currently yields 3.62%
- In the absence of decent Treasury yields, anything that yielded a dividend was highly sought after by investors in 2010
- Treasury yields have come back somewhat, but only the 30-year is yielding better than FCG at 4.54%
- The case for dividends is a strong one right now: After getting beaten up over the last couple years, dividend ETFs present investors with an opportunity to earn some extra yield
- Although the average dividend yield on the S&P is 2.4% and the yield on 10-year Treasuries is 3.46%, dividend stocks come with potential price appreciation and/or dividend hikes, says Consumer Affairs.
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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.