FGD also offers some exposure to an improving dividend scenario in the Eurozone as France, Germany, Spain and Finland combine for about 22% of the ETF’s weight.
If there is a drawback to FGD, it is easy to spot: The large, combined weight to telecom and utilities, even if mainly of the foreign variety, implies some of level of vulnerability to rising interest rates. High-yield stocks, particularly from those sectors, are seen as sensitive to rising interest rates.
That much was on display last year when as 10-year Treasury yields spiked, FDG gained just 17.6% compared to 21.4% for the iShares MSCI EAFE ETF (NYSEArca: EFA).
First Trust Dow Jones Global Select Dividend Index Fund
Tom Lydon’s clients own shares of EFA.