A Sea of Dividends Awaits Thoughtful Investors

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Yield-oriented investors often choose domestic companies that pay high dividends, but this path may not always be ideal. With current equity valuations, there is some sentiment that the United States may not offer the best potential for stock market returns right now.

Advertisement.

The U.S. market has been moving sluggishly of late, and better profits may be found overseas. One way to combine an overseas focus with income investing in a single exchange-traded fund (ETF) is through the SPDR S&P International Dividend ETF (DWX).

Investors who already have a portfolio full of domestic equities would be wise to diversify their holdings, on principle, to include foreign opportunities. The use of a single international ETF rather than investing in specific non-U.S. securities is particularly appealing because buying shares of multiple stocks requires paying additional commissions. This factor may make a fund’s expense ratios less of a concern when comparing choices. The expense ratio for DWX is 0.45%.

The best part about dividend-paying securities is that investors can benefit from their income alongside share-price appreciation. So far this year, DWX has appreciated by 3.05%. It also will pay out its 5.44% yield in the form of dividends over the course of the year. Its performance across a 12-month period is a bit weaker. However, the comparison includes a time when foreign markets were out of favor, as well as a drag from its large energy positions.

Advertisement.

DWX_060515

In terms of sector allocation, DWX’s funds are most concentrated in the energy sector, 25.04%; financials, 23.42%; and utilities, 15.27%. The largest specific companies in holding size for DWX are Canadian Oil Sands Limited, 4.14%; Baytex Energy Corp., 3.36%; Crescent Point Energy Corp., 2.77%; Royal Dutch Shell PLC Class A shares, 2.72%; and Vodafone Group PLC, 2.64%. The top 10 companies in its portfolio combine to total 28.04% of its assets.

Exclusive  Five Reasons to Day-Trade Amid War and Catastrophes

If you have an interest in investing in dividend-based securities off the beaten path or need to add international exposure to an existing high-yield portfolio, SPDR S&P International Dividend ETF (DWX) may be worth including.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

Advertisement.

In case you missed it, I encourage you to read my e-letter column from last week about a domestic rising-dividend fund. I also invite you to comment in the space provided below.

share on:
share on:

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader
LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader
LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener
LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program
LEARN MORE HERE

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader
LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor
LEARN MORE HERE

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle
LEARN MORE HERE

DayTradeSPY

DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops
LEARN MORE HERE