are still in style. In March alone, dividend ETFs attracted $3
billion in assets,
according to iShares data
With U.S. equity-based ETFs attracting over $37.3 billion in
assets in the first quarter, it is fair to say U.S. dividend
funds are leading the way in that ETF sub-segment.
Of course, there are some
credible options among international dividend
ETFs as well
. The advantage here is that not only do investors gain
international portfolio diversity, but, in many cases, higher
yields as well.
Income investors looking for some global exposure should give
the following unheralded funds a look.
Guggenheim International Multi-Asset Income ETF (NYSE:
) The Guggenheim International Multi-Asset Income ETF has a
couple of strikes against it, notably that it is down one percent
year-to-date and volume in the fund is just 20,500 shares per
day. Fans of superficial ETF metrics can at least find some
comfort in knowing HGI has almost $120 million in assets under
More importantly, HGI has a 30-day SEC yield of 4.55 percent.
The ETF is comprised of global REITs, master limited
partnerships, Canadian royalty trusts, American depositary
receipts of emerging market companies and U.S. listed closed-end
funds that invest in international companies and must always hold
at least 40 percent of its portfolio in non-U.S. equities,
according to Guggenheim.
As of the end of the fourth quarter, the U.S. was HGI's
second-largest country weight at 15.4 percent behind the 19.2
percent allocated to the U.K. Hong Kong, Japan and France round
out the ETF's top-five country weights. There is slight emerging
markets exposure in the form of a 5.8 percent combined weight to
Brazil and Chile.
HGI is benchmarked to the MSCI EAFE Index, the index tracked
by the highly popular iShares MSCI EAFE Index Fund (NYSE:
). EFA has outperformed HGI over the past year, but in 2012 HGI
was nearly 100 basis points less volatile than the MSCI EAFE
according to Guggenheim data
Guggenheim S&PGlobal Dividend Opportunities Index ETF
) The Guggenheim S&PGlobal Dividend Opportunities Index ETF
is smaller than HGI ($63.7 million in AUM), but more heavily
traded (ADV of 56,200 shares). LVL has also traded slightly
higher this year, probably due in large part to the fact that the
U.S. is the ETF's largest country weight at almost 16.6 percent.
Australia checks in second at almost 11.4 percent and Aussie
stocks have been sturdy this year as well.
LVL does have a whopping 7.07 percent 30-day SEC yield, but
there are a couple of things to consider regarding that yield.
First, LVL is not all that diverse at the sector level, though it
high-yielding foreign telecoms account for 23.7 percent of the
ETF's weight. Adding to the risk profile is a 22.5 percent weight
to financials. Typical dividend sectors such as consumer staples,
health care and utilities are arguably under-represented in this
Further contributing to the high yield is LVL's Eurozone-heavy
country allocations. France and Germany combing for nearly 17
percent of the ETF's weight is one thing, Spain, Portugal and
Italy combing for 14.6 percent is another matter altogether.
Still, it is important to note LVL is weighted by yield and
that does not necessarily mean a bad ETF. LVL is up 3.7 percent
in the past six months, which is not dreadful. However, the yield
weighting can lead to an increase in volatility and that is the
case with LVL, which has been slightly more volatile than the
MSCI World Index,
according to Guggenheim data
WisdomTree Japan SmallCap Dividend Fund (NYSE:
) The WisdomTree Japan SmallCap Dividend Fund is not going to wow
anyone with its yield, which is just half a percent on a 30-day
SEC basis. Although Japan is not one of the premier dividend
destinations in the developed world, DFJ does offer plenty of
First, DFJ is not all that volatile. In fact, the ETF fits the
bill as "low beta" with a beta of just 0.36 against the S&P
according to WisdomTree data
. Second, the weak-yen induced rally in Japanese equities has
been good news for small-caps as well. DFJ is up almost 13
percent in the past 90 days.
DFJ does not offer a USD/JPY hedge, but it is levered to the
export story as industrial and discretionary names combine for
over 46 percent of the fund's weight. DFJ has $187.3 million in
AUM and an annual expense ratio of 0.58 percent.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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