Finding Income and Yield Outside the U.S.

The $4 billion IDV tracks the Dow Jones EPAC Select Dividend Index and holds nearly 100 stocks. IDV has a trailing 12-month yield of 4.3%, well above what investors will find on major U.S. equity indexes or 10-year Treasuries.

Just under 20 countries are represented in IDV’s lineup, but the bulk of the ETF’s geographic weight is allocated to the U.K., France and Australia. Those countries combine for half IDV’s geographic lineup.

“While the international markets still have to work through a fair number of issues (Brexit, potential government bankruptcies, etc.), there are signs of optimism. The Eurozone especially is looking stronger. Manufacturing expanded at the fastest pace in over five years. The retail sales reading for April jumped all the way up to 52.7, while GDP grew at a 1.7% year-over-year rate. The Chinese PMI number dipped to 51.2 in April but is still near multi-year highs, while Japanese PMI has shown seven consecutive months of expansion,” according to ETF Daily News.

IDV’s P/E ratio of just over 14 implies a substantial discount to U.S. stocks.

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