A Smart Investing Idea for Ex-US Dividend Growth

Investors frequently hear about the potency of dividend growth as it pertains to U.S. stocks and there are plenty of US-focused exchange traded funds to help with the dividend growth objective. However, there are some international options worth considering, too.

For example, the iShares International Dividend Growth ETF (BATS: IGRO) can be seen as the international counterpart of the popular iShares Core Dividend Growth ETF (NYSEArca: DGRO). In a suddenly struggling equity market, IGRO was one of small number of ETFs hitting new highs in Thursday’s trading session.

IGRO, which debuted a year ago, follows the Morningstar Global ex-US Dividend Growth Index. That benchmark represents 97 percent of ex-U.S. market capitalization, including developed and emerging markets. The index screens for at least five years of uninterrupted dividend growth while screening for companies with the ability to continue raising payouts, according to Morningstar.

Ex-U.S. developed market dividend payers often feature larger yields than their U.S. counterparts, an assertion proven by comparing large- and mega-cap dividend stocks from familiar dividend sectors such as consumer staples, energy, financial services and telecommunications.