A Smart Beta Idea for International Income

Investors looking for added equity income at a time of still low interest rates throughout the developed world can consider international dividend exchange traded funds. A newer though still compelling option from that group is the O’Shares FTSE Russell International Quality Dividend ETF (NYSEArca: ONTL).

The O’Shares FTSE Russell International Quality Dividend ETF debuted in March and “is designed to be a core investment holding, providing cost efficient access to a portfolio of large cap high quality, low volatility, dividend paying international companies (ex US) selected based on fundamental metrics,” according to O’Shares Investments.

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.