On the back of a stellar showing in the U.S. in the first quarter, global dividend growth could be shaping up for another positive year.
At a time of still-paltry global bond yields and increasing equity market volatility, dividend steadiness is all the more coveted by investors. Those seeking international exposure and the higher dividend yields found in those markets have a variety of exchange traded funds to evaluate, including the ALPS International Sector Dividend Dogs ETF (NYSEArca: IDOG).
IDOG is higher by 1.07% year-to-date. It’s not an earth-shattering performance, but it’s considerably superior to the 2022 loss of 12.52% sported by the MSCI EAFE Index.
Additionally, IDOG employs an equal-weight sector methodology, meaning that the ALPS fund is overweight to some sectors that are generating impressive payout growth and are exceedingly relevant in today’s macroeconomic climate.
“Globally, every sector posted year-over-year increases. Among the major sectors, oil and mining dividends saw the fastest growth in the first quarter. Mining payouts jumped 29.7% on a headline basis, which in this case is currently a better measure than our underlying figure (+38.0%), given the recent importance of one-off special dividends for this highly cyclical sector,” according to Janus Henderson, which recently published the latest update on the Janus Henderson Global Dividend Index.
Mining stocks reside in the materials sector. Speaking of mining equities, Janus Henderson notes that mining giant BHP is set to be the world’s largest dividend-payer in 2022, marking the second straight year in which it reaches that status. That stock is an IDOG component.
IDOG’s materials exposure is relevant to investors for other reasons, including Russia’s ongoing war with Ukraine, which is also propelling some of the fund’s energy holdings, which make up 11.36% of its weight.
“It is clear miners will continue to be a significant contributor in 2022, potentially paying more than $100bn in dividends for the first time. Both oil and metal prices have been propelled higher following the Russian invasion of Ukraine, helping to sustain dividend growth in these sectors for the time being,” added Janus Henderson.
IDOG yields 4.29%, or more than double the 2% found on the MSCI EAFE Index.
Other international developed market dividend ETFs include the FlexShares International Quality Dividend Dynamic Index Fund (NYSEArca: IQDY), the ProShares MSCI EAFE Dividend Growers ETF (CBOE: EFAD), and the SPDR S&P International Dividend ETF (NYSEArca: DWX).
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.