Investors Shouldn’t Forget to Look Overseas for Dividend Opportunities

With rates at historical lows, finding enough yield is like locating a needle in the haystack for fixed income investors. However, one area is to look overseas if investors know where to look.

“During times of market tumult, many investors choose to purchase shares in companies that have a history of stable dividend growth to secure reliable dividend payouts,” a Stock Investor article noted. “Studies by Ned David Research, among others, have lent empirical support to this strategy as scholars have found that both domestic and international companies whose dividends increased year-over-year for the past 20 years outperformed companies whose dividends either remained flat or decreased.

“A problem with this plan is discovering the companies that have such a history, as predicting which ones are best suited to endure the unpredictable shocks that the world generates without cutting or eliminating the dividend payouts,” the report added.

^SNID data by YCharts

As such, to take out the guesswork, here are a few other international funds to consider with an emphasis on dividends:

1. FlexShares International Quality Dividend Dynamic Index Fund (IQDY): seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust International Quality Dividend Dynamic IndexSM. 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. The fund will invest at least 80% of its total assets in the securities of the index and in ADRs and GDRs based on the securities in the index.
2. FlexShares International Quality Dividend Index Fund (IQDF): seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust International Quality Dividend IndexSM. 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. The fund will invest at least 80% of its total assets in the securities of the index and in ADRs and GDRs based on the securities in the index.
3. FlexShares International Quality Dividend Defensive Index Fund (IQDE): seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust International Quality Dividend Defensive IndexSM. The underlying 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. The fund will invest at least 80% of its total assets in the securities of the underlying index and in ADRs and GDRs based on the securities in the underlying index.

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