Developed market stocks outside the U.S. are soaring this year. Investors can tap that theme while generating some extra income with an array of exchange traded funds, including the Global X MSCI SuperDividend EAFE ETF (NASDAQ: EFAS). EFAS, which is not yet a year old, hit a 52-week high last Friday.
EFAS is part of a SuperDividend suite that targets the highest yielding securities across a variety of geographies and asset classes. EFAS helps round out the series, tracking the 50 highest dividend stocks present in the MSCI EAFE Index. Income-minded investors will also like to know that the fund will have a monthly distribution.
Ex-U.S. developed market dividend payers often feature larger yields than their U.S. counterparts, an assertion proven by comparing large- and mega-cap dividend stocks from familiar dividend sectors such as consumer staples, energy, financial services and telecommunications.
Low interest rates in the U.S. have sent investors flocking to dividend stocks and exchange traded funds in recent years. With central banks throughout the developed world paring rates and engaging in monetary easing, government bond yields are falling, giving investors good reason to consider international dividend ETFs.
EFAS “invests in 50 of the highest dividend yielding equity securities from the MSCI EAFE Index, which includes securities from international developed markets across Europe, Australasia, and the Far East,” according to Global X. The ETF tracks the MSCI EAFE Top 50 Dividend Index.
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At the end of the second quarter, EFAS held 50 stocks with over 37% of the ETF’s combined geographic weight allocated to the U.K. and Australia. France, the Eurozone’s third-largest economy, and Sweden, the largest Nordic economy, combine for over 20% of the fund’s weight. Overall, EFAS features exposure to 16 countries.
At the end of the second quarter, financial services stocks commanded 34.6% of the EFAS roster whiel telecommunications and consumer discretionary names combined for 28.5%. Utilities and energy stocks combined for 22.5%. The average market value of the EFAS holdings is $34.2 billion, according to issuer data.
EFAS charges 0.55% per year, or $55 on a $10,000 investment. Like the other SuperDividend ETFs, EFAS pays a monthly dividend.
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