In a market permeated by risk-off sentiment, it is not surprising to see scores of dividend exchange traded funds making new all-time highs. Notable is the fact that international payout funds dot the daily list of ETFs at new all-time highs.
Among the recent members of the new all-time high club is the FlexShares International Quality Dividend Index Fund (NYSEArca: IQDF). Year-to-date, IQDF is higher by 7.1% and flows data indicate investors are embracing the advantages of global dividend payers in their income portfolios.
IQDF is just 13 months and already has $169.5 million in assets under management. More impressive is that $77.4 million, or 45.6%, of IQDF’s current AUM total has flowed into the ETF just this year.
How IQDF goes about its business is not complex. The ETF is a smart beta fund that focuses on fundamental factors, such as profitability, solid management and reliable cash flow. After all, profitability and free cash flow generation are vital tells regarding a company’s ability to continue paying and raising dividends. [Consider International Dividend ETFs]
Japan is IQDF’s second-largest country weight with an allocation of 11.7%. Although the world’s third-largest economy has previously sported lower yields than other developed markets and not been a dividend destination on par with the U.S. or U.K., a weaker yen is helping facilitate dividend growth there.
The U.K., IQDF’s largest country weight, and Australia combine for nearly a quarter of the ETF’s weight. That bolsters the bull case for IQDF when considering Australian dividends are expected to grow this year after firms there paid $40.3 billion in dividends last year. [Remember Australian Dividends]