With the possibility of S&P 500's momentum fading and equity outflows mounting, defensive ETFs like VIG, XLP and VXX draw investor focus.
The iShares International Select Dividend ETF offers a high yield of 5.17%, but long-term returns have been underwhelming, with just a 3.56% CAGR since 2007. IDV's top holdings are in structurally challenged sectors like European telecoms and mining, which tend to be poor long-term performers. The ETF's 48% turnover rate and 0.49% expense ratio make it less attractive for long-term investors.
For investors seeking momentum, iShares International Select Dividend ETF IDV is probably on the radar. The fund just hit a 52-week high and is up 21% from its 52-week low of $26.89 per share.
iShares International Select Dividend ETF warrants a hold rating due to sub-optimal qualities compared to peer funds, including high fees and weaker fundamentals. IDV's top holdings have high payout ratios, leading to lower dividend sustainability and growth compared to competitors like VYMI. Despite strong recent performance, IDV's high fees and declining dividend yield make it less attractive than VYMI, which offers better growth and sustainability.
iShares International Select Dividend ETF (IDV) holds a portfolio of 99 dividend stocks from developed countries. IDV has a focus on the U.K. and financials, and it is well-diversified across holdings. IDV has a compelling 6% yield, but total return since inception and dividend growth since 2014 are underwhelming, especially after taking inflation into account.
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Higher-yielding exchange-traded funds (ETFs) can be a quick and simple way to give oneself a sustained passive income raise.
IDV's portfolio of high-yielding dividend stocks in developed markets is well-positioned to benefit from a lower rate environment and a weakening U.S. dollar. Central banks like the Bank of England and ECB are turning dovish, which should act as a catalyst for IDV's fund price to move higher. The expected weakening of the U.S. dollar due to Federal Reserve rate cuts will likely benefit IDV, given its inverse correlation with the dollar's strength.
There are some excellent opportunities for investors in international stocks. The iShares International Select Dividend ETF offers a portfolio of top-notch dividend stocks in developing countries.
International investing and diversification away from large-cap Tech is recommended at this point in the cycle. Consider iShares International Select Dividend ETF for exposure to developed market equities with a 5.9% yield. IDV offers well-diversified sector allocation, geographic diversification, and access to large international companies with a history of paying dividends.
With exchange-traded funds (ETFs) generating solid performances over the long run, it stands to reason that investors should consider income-generating ETFs to buy. Basically, all the benefits associated with these wide-canvas plays for capital gains apply to dividends as well.