Drill Down on Dividends with the DNL ETF

U.S. dividend payers account for a significant percentage of global payouts. Combine that with a home country bias and it’s easy to understand why some investors gloss over international dividend fare.

Income-hungry investors may want to reconsider that view, and can do just that with the WisdomTree Global ex-U.S. Dividend Growth Fund (NYSEArca: DNL). The $386.74 million DNL is worth considering today as the outlook for international payouts improves. Janus Henderson’s Global Dividend Index ended the first quarter at its lowest levels since 2017, but the firm sees payout growth on the way.

“For the full year 2021, the stronger first quarter along with a better outlook for the rest of the year have enabled Janus Henderson to upgrade its expectations for global dividends,” according to a new report released by the firm. “The new central-case forecast is $1.36 trillion, up 8.4% year-on-year on a headline basis, equivalent to an underlying rise of 7.3%. This compares to January’s best-case forecast of $1.32 trillion.”

DNL 1 Year Performance

A Compelling Geographic Outlook for ‘DNL’

Up 8.42% year-to-date, DNL yields 1.79%, implying there’s room for payout growth among its components. Its European exposure should help.

“Payouts in Europe (ex-UK) rose year-on-year, up 10.8% on a headline basis to $42.5 billion, boosted by catch-up payments from Scandinavian banks. Equally Switzerland made a disproportionate contribution in Q1 and companies there have also proven resilient,” according to Janus Henderson.

DNL has 28 geographic exposures, nine of which are Europe ex-UK and three of which are Scandinavian nations. Switzerland is the fund’s second-largest country exposure at almost 12%, trailing only Japan.

Like the other ETFs in WisdomTree’s quality dividend growth suite, DNL deploys a fundamentally weighted methodology that focus on earnings expectations, return on assets, and return on equity, among other traits. DNL does not give investors a crystal ball, but the fund can gauge a company’s ability to maintain and grow payouts.

DNL’s also weights almost 10% of its holdings to U.K. equities.

“Less than half of British companies in our index cut dividends in Q1, much better than over the last year. There are also signs of a revival with the headline total for UK dividends rising 8.1% in Q1 thanks to a number of extra payouts and special dividends,” concludes Janus Henderson.

For more news, information, and strategy, visit the Dividend Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.