Exchange traded funds emphasizing the quality factor have grown in prominence and population this year with several new offerings feature global quality tilts with dividend kickers.
One of the newer entrants to the quality factor/global dividend ETF arena is the Market Vectors MSCI International Quality Dividend ETF (NYSEArca: QDXU), which debuted in January. The quality factor “captures excess returns to stocks that are characterized by low debt, stable earnings growth and other ‘quality’ metrics,” according to MSCI.
Quality’s officiousness regarding global investments cannot be understated. Not only have quality-driven international indices been less volatile than traditional equivalents, but the quality factor has also outperformed broad international and emerging markets. http://www.etftrends.com/2014/01/market-vectors-makes-quality-push-with-4-new-etfs/
QDXU tracks the MSCI ACWI ex USA High Dividend Yield Index, a rules-based index comprised of companies “hat have demonstrated dividend yields that are higher than the average dividend yield of the MSCI ACWI ex USA Index,” according to Market Vectors.
The ETF offers exposure to 20 countries, including seven emerging markets. China and Russia are the two largest emerging markets allocations in QDXU, combining for 10.6% of the ETF’s weight. That is an important factor to consider because China and Russia have two of the more favorable emerging markets dividend policies. [China’s Dividend Growth Story]
Overall, the ETF allocates to nine developed Europe nations with the U.K., Germany, France and Switzerland combining for nearly half the ETF’s weight. QDXU’s combined 29.4% weight to the U.K. and Australia is another trait that highlights
In 2013, the U.K. was the second-largest developed market dividend payer in dollar terms after the U.S. while Australian companies paid $40.3 billion in dividends last year, nearly double the amount paid in 2013. [A Nifty Global Dividend ETF]