The ALPS International Sector Dividend Dogs ETF (IDOG) is an attractive fund on the market, offering strong returns amid a turbulent market as well as a high dividend yield.
Looking abroad is one way that investors are finding ways to boost the yield in equities. IDOG was the top-performing fund in ALPS’ ETF line-up during January, running laps around its category peers that saw negative average returns for the month.
Non-U.S. equities compose nearly 40% of global equity market capitalization when looking at the MSCI ACWI Index, as of November 2021, and while the U.S. is the largest source of dividends, it only represents about half of the global dividend pool, according to MSCI.
IDOG offers exposure to international equities, excluding North America, that offer the highest dividends in each sector. The fund has returned 5.66% year-to-date; its peers in the FactSet equity developed markets ex-U.S. large-cap segment averaged a 0.26% return year to date, according to ETF Database.
Over a one-year period, IDOG returned 13.66%, and its segment peers’ average return is 7.88%, according to ETF Database.
The cumulative return for IDOG over a three-year period is 30.55%; the segment average is 16.80% over the same period, according to ETF Database.
IDOG offers an annual dividend yield of 3.96% compared to the segment average of 2.30%, according to ETF Database.
IDOG, which came to market in 2013, has $172 million in assets under management and carries an expense ratio of 50 basis points. The starting universe for IDOG is the S-Network Developed Markets (ex NA) Index.
Screening is then isolated at the sector level, providing high dividend exposure by selecting the five highest-yielding securities in 10 of the 11 Global Industry Classification Standard (GICS) sectors (excluding the real estate sector), according to ALPS.
Equal weighting at the stock and sector level provides diversification while avoiding sector biases.
The regional breakdown of IDOG’s holdings is nearly one-third in Asia Pacific and two-thirds in Europe, according to ETF Database.
Looking deeper, the countries that the fund has the greatest exposure to include Japan (19.21%), the United Kingdom (19.03%), Australia (11.56%), France (8.3%), and Spain (8.11%), among others.
Other international dividend ETFs include the Schwab Fundamental International Large Co. Index ETF (FNDF) and the VictoryShares International High Div Volatility Wtd ETF (CID).
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