Domestic and international dividend stocks are on better footing to start 2021.
Advisors can position for what’s expected to be a materially better environment for payout names with the Global Dividend Model Portfolio, which is part of WisdomTree’s Modern Alpha series of model portfolios.
“This model portfolio seeks to provide capital appreciation and high current dividend income, through a globally diversified set of WisdomTree’s dividend income oriented equity ETFs. The model strives to deliver dividend income in excess of the global benchmark of equities,” according to WisdomTree.
Getting dividends that can counteract low rates from safe haven government debt is just one aspect of the current fixed income game. The second key is getting quality dividend exposure, which investors can find in the Global Dividend Model Portfolio.
A Global Presence for Dividends
As income-minded investors look for ways to bolster returns in a low-rate environment, various exchange traded funds can rise to the challenge.
Dividends are in demand as fixed-income investors face a lower-for-longer interest rate environment. The Federal Reserve is expected to maintain its near-zero interest rate policy to help push inflation up, bolster the economy, and lower the unemployment rate. The Fed has already stated it is willing to let inflation run higher to offset years inflation fell below its 2% target. Historically, dividend growers are strong inflation fighters.
The WisdomTree model portfolio also features robust international exposure, helping investors gain improved risk-adjusted returns in European markets, among others. Furthermore, its dividend focus helps investors focus on quality companies with a history of growing dividends.
Stocks in Europe and in international developed markets often have higher yields than those in the U.S. That means it’s possible to take advantage of a dividend growth strategy and relatively high dividend yields. International dividend growth stocks also come without the added interest rate sensitivity of high dividend-paying stocks in the United States.
For more on how to implement model portfolios, visit our Model Portfolio Channel.
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.