Investors are increasingly looking to international ETFs as the U.S. economy continues to lose momentum.
To start the year, the eurozone has seen a slight pickup in economic activity while U.S. businesses report further declines. As investors look to add exposure to international ETFs, particularly those that overweight Europe, the ALPS International Sector Dividend Dogs ETF (IDOG) is seeing a notable spike in interest.
“Advisors started 2023 looking more toward international markets, amid signs that European markets were going hold up better,” Todd Rosenbluth, head of research at VettaFi, said. “However, they still like the stability that high dividend-yielding securities provide. IDOG provides a strong combination and is likely to garner more interest as it passes key asset milestones.”
The fund has seen a dramatic increase in trading volume recently, with a one-month average trading volume over 80,000, compared to a three-month average volume of just under 39,000.
Over 507,000 shares traded hands on January 10, followed by two consecutive days of trading volume above 265,000 the following week. This is a positive sign that there’s ample liquidity for larger investors to get in without issue, according to Rosenbluth.
IDOG is outpacing broader U.S. markets: Year to date as of January 23, IDOG has jumped 7.74% while the S&P 500 — tracked by the SPDR S&P 500 ETF Trust (SPY) — has gained 4.78%, each on a total return basis. Over a six-month period, IDOG is up 13.07% while the S&P 500 has increased by 2.35%.
IDOG, which has $193 million in assets under management, has accreted $39 million in flows over one year as of January 23.
While IDOG is an international developed markets dividend ETF, nearly 70% of the fund by weight is in European equities. The other 30% of the fund by weight offers exposure to Japan, Australia, Hong Kong, and Israel as of January 23.
IDOG’s overweight eurozone allocations could be a perk for the fund’s investors this year as markets work past the geopolitical issues that negatively impacted the region’s stocks in 2022.
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vettafi.com is owned by VettaFi, which also owns the index provider for IDOG. VettaFi is not the sponsor of IDOG but VettaFi’s affiliate receives an index licensing fee from the ETF sponsor.