Markets in November were characterized by easing inflation and optimism surrounding a potential slowing pace of U.S. rate hikes.
The positive performance was observed across the board last month, with the S&P 500 posting its second consecutive month of gains, with a total return of 5.6%. The S&P MidCap 400 and S&P SmallCap 600 were up 6.1% and 4.2%, respectively. U.S. fixed income index performances were also positive across the board as Treasury yields declined as a result of easing inflation.
Notably, the top-performing ETFs in SS&C ALPS Advisors’ suite of funds last month were all international ETFs. The ALPS International Sector Dividend Dogs ETF (IDOG), the ALPS O’Shares Europe Quality Dividend ETF (OEUR), and the ALPS Emerging Sector Dividend Dogs ETF (EDOG) all posted double-digit gains in November, outperforming the S&P 500, tracked by the SPDR S&P 500 ETF Trust (SPY).
“International equities rallied in 2022 as investors had renewed confidence that U.S. monetarily policy would shift and were willing take on additional risk,” Todd Rosenbluth, head of research at VettaFi, said. “These international ETFs have the added benefit of a quality tilt which should help if sentiment modestly weakens heading into 2023.”
ALPS’ top-performing ETF in November, IDOG, returned 12.6%. The fund is known for its attractive income, boasting a dividend yield of 3.97%, according to ALPS.
IDOG applies the “Dogs of the Dow Theory” on a sector-by-sector basis using the S-Network Developed Markets (ex-Americas) Index as its starting universe of eligible securities. IDOG provides high dividend exposure across 10 sectors of the market by selecting the five highest-yielding securities in each sector and equally weighting them.
Trailing IDOG is OEUR, which returned 12.5% in November. The fund is designed to provide efficient and transparent access to a portfolio of large-cap and mid-cap dividend-paying companies in Europe selected based on several fundamental metrics such as quality, low volatility, and dividend growth.
OEUR has an emphasis on dividend quality to help avoid dividend cuts and suspensions and aims to provide strong performance with less risk, according to ALPS.
Rounding out the top three is EDOG, which returned 10.3% last month. EDOG shares a similar methodology to IDOG but limits exposure to emerging markets. EDOG applies the “Dogs of the Dow Theory” on a sector-by-sector basis, using the S-Network Emerging Markets Index as its starting universe of eligible securities.
EDOG offers high dividend exposure across all sectors of the market by selecting the five highest-yielding securities in 10 of the 11 GICS sectors, excluding real estate. The country representation is capped at five eligible securities per country. The fund is equally weighting at the stock and sector level and may provide diversification while avoiding sector biases, according to ALPS.
vettafi.com is owned by VettaFi, which also owns the index provider for IDOG and EDOG. VettaFi is not the sponsor of IDOG and EDOG, but VettaFi’s affiliate receives an index licensing fee from the ETF sponsor.