Although 10-year Treasury yields have tumbled 7.1 percent in
the past five trading days, uncertainty regarding the future of
the Federal Reserve's quantitative easing program lingers and
that could lead rates higher yet again.
When 10-year Treasuries were recently flirting with yields of
three percent, that yield was not only well above that of the
S&P 500, but some popular dividend ETFs as well. For
investors, the good news is there are plenty of global dividend
ETFs that yield well above three percent.
Nifty New Dividend ETFs
"S&P Capital IQ Global Equity Strategist Alec Young notes
that with the exception of Japan, major foreign stock markets in
Europe, Latin America, Canada, Australia and emerging Asia all
yield more than their U.S. counterpart, with payouts ranging from
3.0%-4.5%, vs. only 2.0% for the S&P 500 Index. Young adds
that the year to date international equity underperformance
relative to U.S. stocks has left foreign dividend yields higher
due to limited capital appreciation," said the research firm in a
S&P Capital IQ has Buy or Strong Buy ratings on eight
American depository receipts that yield more than three percent,
including France's Total (NYSE:
), Europe's third-largest oil company, and Brazil's Vale (NYSE:
), the world' largest iron ore maker. The research is also
somewhat encouraged by a pair of international dividend ETFs, one
of which is the SPDR S&P International Dividend ETF (NYSE:
Home to over $1.3 billion in assets under management, DWX
earns a Marketweight rating from S&P Captial IQ. DWX charges
0.45 percent per year and sports a dividend yield of 6.72
percent. At the sector level, financial services names dominate
DWX with an allocation of 23.5 percent. Telecom and utilities
garner weights of 18.5 and 12.6 percent, respectively.
offers exposure to 28 countries
, though Australia is by far the largest country weight in the
fund at 22.5 percent, two and a half times the allocation given
to the U.K.
While DWX is mostly weighted toward developed markets,
investors should note the ETF does feature exposure, albeit
fractional in some cases, to 10 emerging markets, including South
Africa, China and Brazil. Some emerging markets
proving to be dividend growers
and that could bode well for DWX in the future.
S&P Capital IQ also has a Marketweight rating on the
$353.6 million First Trust Dow Jones Global Select Dividend Index
). FGD is noticeably different from DWX on several levels. For
example, the First Trust offering is a global ETF, not an ex-U.S.
fund and that means the U.S. is the fund's largest country weight
at 17 percent. Australia is next at 16.3 percent. FGD's top-10
country weights, which comprise nearly three-quarters of the
fund's weight, are developed markets.
Companies need to meet certain criteria to be included in
FGD's lineup, including "having a current-year dividend-per-share
ratio that is greater than or equal to its five-year average
annual dividend-per-share ratio and a five-year average payout
ratio of less than or equal to 60% for U.S. and European
companies; or less than or equal to 80% for all other countries,"
according to First Trust
overlooked in the international dividend ETF
, allocates a combined 61 percent of its weight to the telecom,
industrial and financial services sectors. The ETF's 30-day SEC
yield is almost 6.4 percent and FGD is up 5.2 percent
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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