In the first quarter, global dividends ascended to another all-time high. Not surprisingly, the U.S. again led the charge. That was aided by payout growth and initiations and resumptions of dividends by some marquee companies.
Not to be lost in the shuffle is strength in international payouts, including in ex-US markets. Advisors and investors looking to capitalize on that theme have a variety of ETFs to consider. That includes the ALPS International Sector Dividend Dogs ETF (IDOG). This fund, which turns 11 years old next month, follows the S-Network International Sector Dividend Dogs Index.
IDOG is a high-dividend strategy, meaning it doesn’t explicitly emphasize payout growth. However, many of its holdings are established track records of boosting distributions over the long term. Others are climbing the ranks of reliable dividend growers.
Assessing Dividends ETF IDOG’s Advantages
As its name implies, IDOG is an international ETF. That indicates it’s not dedicated to a specific region, such as Asia or Europe. Rather, the ETF features exposure to 18 countries from both continents. And that indicates it has broad reach in terms of tapping payouts from a variety nations.
One example is Japan, which accounts for 7.20% of IDOG’s geographic exposure. IDOG’s Japan allocation is relevant because that country is increasingly prompting its companies to improve corporate governance. Those efforts include boosting shareholder rewards. There was modest evidence of those reforms taking shape in the first quarter.
“The first quarter is seasonally subdued in Japan. Growth of 12.1% on an underlying basis was masked at the headline level by a weaker yen and followed the encouraging trend of 2023. Most companies made double digit increases, while semiconductor company Renesas made its first payment in many years. Only Japan Tobacco cut. A focus on corporate governance is driving a cultural shift in Japan that is favouring more dividend payments to shareholders,” according to the latest edition of the Janus Henderson Global Dividend Index.
Subdued Dividend Trajectory
The U.K., which accounts for 14.55% of the IDOG roster, saw a subdued dividend trajectory in the first quarter. Janus noted that was true across other parts of Europe as well. However, the research firm noted overall divided trends in Europe are encouraging. There was evidence of that in the March quarter. That’s due to notable payout growth in Italy, the Netherlands, and Spain. Those countries combine for over 19% of IDOG’s geographic exposure.
In the first quarter, six of the 10 largest dividend payers in the world in dollar terms were ex-US companies,. Those include two IDOG holdings: mining giant BHP and Swiss pharma behemoth Roche.
VettaFi LLC (“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.
For more news, information, and analysis, visit the ETF Building Blocks Channel.
