Ex-US equity markets are trailing domestic stocks this year, but investors looking to position for a rebound in international stocks may want to consider the advantages of a dividend strategy.
The Xtrackers MSCI All World ex-U.S. High Dividend Yield Equity ETF (NYSEArca: HDAW) is an exchange traded fund that can help reduce volatility and boost income profiles while keeping investors with international equities.
“In today’s low-yielding interest rate environment, investors searching for additional sources of income may consider a high-dividend yield approach. High-dividend yielding strategies seek exposure to companies with higher-than-average dividend yields relative to their market-cap-weighted counterparts with the goal of capital preservation and potential long-term capital appreciation,” according to DWS. “Xtrackers MSCI All World ex-U.S. High Dividend Yield Equity ETF seeks to give investors exposure to high-quality international equities across developed and emerging markets countries, and provide an alternative, potentially reliable income stream.”
HDAW targets companies with higher-than-average dividend yields relative to their market-cap-weighted counterparts across both developed and emerging countries, excluding the U.S.
Dividend Growth Considerations
HDAW targets companies with higher-than-average dividend yields relative to their market-cap-weighted counterparts across both developed and emerging countries, excluding the U.S. HDAW yields 3.14%, putting it well ahead of the S&P 500, but the fund also offers some opportunity for dividend growth because some major ex-US markets are home to rising dividends.
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HDAW features ample exposure to some of the most dependable ex-US dividend growth markets.
“Global dividends jumped 12.9 percent year-on-year in the second quarter to $497.4 billion, hitting a new record, according to a report on the Janus Henderson Global Dividend Index,” reports CNBC. “Payments rose in almost every region of the world in headline terms and records were broken in 12 countries including France, Japan, and the U.S.”
As just two examples, France and Japan combine for over 13% of HDAW’s weight. The U.K., another steady, ex-US dividend market, is 15.74% of the fund’s weight.
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