Still, QDXU offers plenty of exposure to Europe. Each of the ETF’s top-10 holdings, a group that represents nearly 30% of the fund’s weight, are European firms. Overall, the ETF allocates to nine developed Europe nations with the U.K., Germany, France and Switzerland combining for over 49% of the fund’s weight.
QDXU’s nearly 310 holdings are screened for quality, stable dividend growth, and dividend sustainability. The fund tracks the MSCI ACWI ex-USA High Dividend Yield Index, which excludes company with poor fundamentals that are candidates for dividend cuts and suspensions. The index had a dividend yield of almost 4.4% at the end of last year and was inexpensive relative to U.S. stocks with a P/E ratio of 11, according to Market Vectors data.
QDXU, which charges 0.45% per year, is already benefiting from resurgent European equities with a gain of 4.4% since its debut. Nearly half of the fund’s foreign currency exposure comes by way of the British pound and euro, something for investors to consider as the fund is not currency hedged and those currencies are seen as overvalued.
Chart Courtesy: Market Vectors
