European equities and the relevant Europe ETFs are among this year’s best-performing developed market assets.
For income investors, the good news is some European dividend strategies are delivering solid returns as well, often with higher yields than equivalent US-focused products.
Like other developed markets, many European markets, both in and out of the Eurozone, are home to major equity benchmarks with higher dividend yields than the S&P 500. The yield disparity between European stocks and bonds has been widening as recent global uncertainty pushed investors out of the equities market and into safe-haven fixed-income assets.
The First Trust STOXX European Select Dividend Index Fund (NYSEArca: FDD) is fund to consider for income investors looking for some extra compensation with their European investments.
FDD slices the STOXX Europe 600 Index into a group of 31 components weighed by dividend yield. In FDD, components are capped at a weight of 15% and weighted by dividend yield.
“Up 13.4% year-to-date, the $522.1 million FDD features a conservative collection of European nations with the U.K., France and Switzerland combining for over 61% of this income ETF’s geographic weight. Top holdings include names like Royal Dutch Shell plc (ADR) (NYSE: RDS.B) and AstraZeneca plc (ADR) (NYSE: AZN),” according to InvestorPlace.