Are dividends back this year? Current income via durable, steady firms would certainly be a nice addition to many investors’ portfolios. For U.S. firms, uncertainty around interest rates might add to the appeal of a steady dividend-paying ETF. And internationally, a dividend strategy could benefit U.S. investors even more. That’s why, it may be work taking a look at the international dividend ETF IHDG, as it hit $2 billion in AUM for the first time.
The WisdomTree International Hedged Quality Dividend Growth Fund (IHDG) currently sits at $2 billion, per YCharts. The international dividend ETF saw its AUM grow by almost $1 billion over just the last year, having started at about $1.1 billion in January 2023. What may have driven that AUM growth, and how could an ETF like IHDG help investors’ portfolios?
One factor in the ETF’s growth may be its near-exclusive focus on non-U.S. equities. Europe stands out at nearly 75% total of the strategy’s holdings, with Japan a big standout for the rest.
International Dividend ETF IHDG’s Approach
The ability for the ETF to help an investor diversify could explain why such stocks would be popular, especially in a dividend fund. U.S. investors may lack helpful information about foreign firms and markets, but dividends provide a strong signal themselves, given that dividends mostly come from firms with healthy outlooks.
IHDG, of course, stands out even more thanks to its specific approach. The international dividend ETF tracks the WisdomTree International Hedged Quality Dividend Growth Index for a 58 basis point fee. That index doesn’t just look for international dividends, it also screens for quality and growth via factors like expected earnings growth, return on equity, and return on assets.
By adding those screens, it can find even stronger firms outside of an overvalued U.S. market. The international dividend ETF has returned 13.2% over the last year, outperforming both its ETF Database Category and FactSet Segment averages. Set to turn 10 years old this May, IHDG’s new AUM threshold may intrigue investors looking for a new international equities ETF to add to their portfolios.
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