For investors interested in finding out the painful areas of investing, SPDR S&P International Dividend ETF ( DWX ) is probably on radar now. The fund just hit a 52-week low, and shares of DWX are down roughly 30.3% from their 52-week high price of $46.55/share.
Are more pains in store for this ETF? Let's take a quick look at the fund and its near-term outlook to get a better idea of where it might be headed:
DWX in Focus
DWX looks to track the performance of about 120 global stocks that offer high dividend yields. The fund focuses on large caps (51%) followed by mid caps (34%). DWX charges investors 45 basis points a year in fees and has top holdings in Fortescue Metals Group Ltd, Berkeley Group Holdings plc and National Grid plc (see broad developed world ETFs here).
Why the Move?
The first Fed rate hike after almost a decade marred the appeal for the high yielding securities. This investing spectrum underperforms in a rising rate environment as the benchmark Treasury bond yields normally start to ascend. Also, global growth worries weighed on this international ETF.
More Pains Ahead?
The fund has a negative weighted alpha of 27.60 . A negative weighted alpha hints at more pain.
So, it is wise to flee the fund at the current level as a broad-based high income investing sell-off may be seen in the coming days as an aftermath of the Fed lift-off. Things will likely take some more time to stabilize.