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.