With U.S. equities soaring, some advisors may be content to stand pat, but with the right approach, international stocks can bolster client outcomes.
Advisors can blend those two concepts with global portfolios, which include U.S. and ex-US exposures. However, getting just the right mix can be difficult. WisdomTree’s Modern Alpha model portfolios can ease that burden with the Siegel-WisdomTree Global Equity Model Portfolio.
This model portfolio is 100% allocated to equities via 13 ETFs, including several from outside the WisdomTree family. The asset mix runs the gamut from domestic large caps to emerging markets small-cap stocks and plenty in between.
“WisdomTree’s collaboration with Professor Siegel brings a unique solution to investors with mid- to long-range time horizons who are trying to balance current income needs with longevity risk,” according to WisdomTree. “The Siegel-WisdomTree Global Equity Model Portfolio provides a diversified exposure to U.S and International stocks and tilts toward factors such as dividend yield and low P/E ratios to seek higher income generation and outperformance potential. This strategy may include both WisdomTree and non-WisdomTree ETFs.”
Perusing The Portfolio
One of the international components in the Siegel-WisdomTree Global Equity Model Portfolio is the WisdomTree International Hedged Quality Dividend Growth Fund (NYSEArca: IHDG).
IHDG targets dividend growers in developed markets, excluding the U.S. and Canada and features a currency hedge that can protect investors in the event the dollar rebounds around developed market currencies. IHDG, which carries an annual expense ratio of 0.58%, tracks the WisdomTree International Hedged Dividend Growth Index (WTIDGH).
IHDG’s holdings are weighted by cash dividends paid, a strategy that can prove useful for investors looking to evaluate the consistency and sustainability of a company’s payouts. Since coming to the market just over three years ago, IHDG has topped more traditional ex-US developed market strategies while being slightly less volatile.
Ex-U.S. developed market dividend payers often feature larger yields than their U.S. counterparts, an assertion proven by comparing large- and mega-cap dividend stocks from familiar dividend sectors such as consumer staples, energy, financial services, and telecommunications.
Speaking of yield, the Siegel-WisdomTree Global Equity Model Portfolio has that. The model portfolio yields about 3%, which is well above what investor earn on 10-year Treasuries or the S&P 500. Importantly, the model portfolio isn’t a high dividend strategy and it emphasizes quality strategies that source dividend growth, keep investors away from potential dividend offenders.
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.