What’s the global growth outlook next year? The picture, like so much else facing markets right now, is murky. The global economy looks set to slow down somewhat overall, but there are bright spots. With that slowdown and headwinds like rising rates and a potential recession facing the U.S., there’s still a strong case to diversify abroad. Investors, then, may want to lean on the power of international dividends in an ETF like the ALPS International Sector Dividend Dogs ETF (IDOG).
Why look to international dividends specifically? Investors and advisors already look to dividends as a potent source of current income. They add present ballast to portfolios, with investors also able to reinvest that income into even more dividends or other strategies as they like. That income and stability can add to the diversification case as it helps boost the overall benefits of a foreign investment vs. potent domestic strategies.
Perhaps the greatest strength of international dividends, however, owes to their strength as a source of information. When investing abroad, investors may not always have the information they’d like to make informed decisions. Dividends, then, can help indicate which firms have healthier outlooks than others when comparing firms across very different economies.
IDOG’s Approach to International Dividends
IDOG provides exposure to that dividends landscape. The ETF tracks an equal-weighted index that chooses the five firms with the highest dividend yields across each for the 10 GICS sectors. That gives the strategy a certain degree of freedom. It can choose the strongest dividend-yielding names across a global universe except for the U.S. and Canada.
IDOG charges a 50 basis point fee to do so, having just hit its ten-year ETF milestone this summer. The strategy has seen robust returns over the last year, returning 24.1% in that time. It’s also done well YTD, returning 8.9% in that time. For those investors curious about adding foreign equities but worried about how global uncertainty would impact some firms, consider how IDOG’s dividend hunt can find companies with healthier outlooks.
vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for IDOG, for which it receives an index licensing fee. However, IDOG is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of IDOG.