Spurred by artificial intelligence (AI) names like Nvidia, global equities are rising with the anticipation of central bank rate cuts and an economy that’s withstanding high inflation.
Europe has seen its major indexes like the STOXX 600 rise to new highs alongside the S&P 500 in the U.S. As a Reuters report noted, the market is benefiting from a “broadly resilient global economy and hopes of interest rate cuts by major central banks later in the year,” which “have boosted global equities.”
While equities globally got off to a slow start for 2024, they’ve rebounded in a big way thanks mainly to positive earnings reports, particularly from household big tech names. Nvidia is the latest member of the “Magnificent Seven” that’s blowing tailwinds not only in the direction of U.S. equities, but across the globe.
“Europe’s stock market is a great case of is the glass half full or half empty,” said Andrew Sheets, global head of corporate credit research at Morgan Stanley.
“On the one hand the market is back up near record highs, and on the other hand, Europe trades at a record discount to the U.S. on a variety of measures,” he added.
An International ETF Dividend Option
With exposure to countries like the United Kingdom, France, Netherlands, and Germany, the ALPS International Sector Dividend Dogs ETF (IDOG) offers exposure to European equities, but with a dividend-focused slant. The fund seeks investment results that replicate as closely as possible the performance of the S-Network International Sector Dividend Dogs Index (IDOGX).
With a 30-day SEC yield of 6.18% as of January 31, it’s an option for fixed income investors looking for other pathways toward yield distributions aside from bonds. This presents a compelling option given the anticipation of lower interest rates to come.
The fund uses a discerning strategy that applies the “Dogs of the Dow Theory” on a sector-by-sector basis using the S-Network Developed International Equity 1000 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.
The fund offers deep country diversification as well, searching for dividend opportunities in other countries like Japan and Hong Kong. With big tech moving the markets these days, it’s no surprise to see information technology as its top sector focus, but it also maintains exposure to other sectors like financials and industrials.
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.
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