Fixed income investors looking beyond safe haven U.S. government Treasury notes for more yield may want to try options overseas. FlexShares has three funds investors may want to consider.
First up is the FlexShares International Quality Dividend Index Fund (IQDF), which seeks investment results that correspond generally to the price and yield performance of the Northern Trust International Quality Dividend Index. The index reflects the performance of a selection of companies that, in aggregate, possess greater financial strength and stability characteristics relative to the Northern Trust International Large Cap Index, a float-adjusted market capitalization-weighted index of non-U.S.-domiciled large- and mid-capitalization companies.
A dividend ETF can be an ideal alternative for investors looking to extract that extra slice of yield, especially in the current market environment. With IQDF, investors also get income diversification with its inclusion of international holdings.
International dividend ETFs work much like their domestic high-dividend counterparts. The obvious discerning feature is that they simply invest in international companies instead of those domiciled in the U.S.
International Options
Another option is the FlexShares International Quality Dividend Defensive Index Fund (IQDE), which seeks investment results that correspond generally to the price and yield performance of the Northern Trust International Quality Dividend Defensive Index. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater financial strength and stability characteristics relative to the Northern Trust International Large Cap Index.
“While international dividend investing is for some investors a well-established equity investment strategy, blindly pursuing international stocks with the highest dividend yields may be dangerous in the long run,” FlexShares says on the product website. “High dividend yields may mask underlying problems—such as weak stock prices due to poor financial performance—that could result in lower future dividend payments.”
Lastly, there’s the FlexShares International Quality Dividend Dynamic Index Fund (IQDY), which seeks investment results that correspond generally to the price and yield performance of the Northern Trust International Quality Dividend Dynamic Index. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater financial strength and stability characteristics relative to the Northern Trust International Large Cap Index.
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