Summary
Franklin Templeton on International Dividends & the Search for Income
At the recent Exchange conference, there was much chatter among advisors concerning the growing role of international dividends. Todd Mathias, Head of U.S. ETF Product Strategy & Development at Franklin Templeton, sat down with VettaFi to discuss the shift toward international dividend strategies.
DIVI: The New Strategy Still Has To Prove Itself
The Franklin International Core Dividend Tilt Index ETF offers above-average yield in developed markets ex-North America, with a 0.09% expense ratio. DIVI's August 2022 strategy overhaul renders prior data obsolete; the current track record remains short and unconvincing for long-term assessment. While well-diversified and low-cost, DIVI has underperformed comparable Foreign Large Value ETFs in both total return and risk-adjusted metrics since the strategy change.
DIVI: Global Dividend Screening For Enhanced Risk-Adjusted Returns
Franklin International Core Dividend Tilt Index ETF is rated a buy for its superior risk-adjusted returns vs. the market benchmark VEA. DIVI's strategy focuses on dividend quality, delivering lower drawdowns and volatility without sacrificing total returns, outperforming VEA on several time horizons. The ETF offers a low expense ratio (0.09%) and strong downside protection, though liquidity remains a concern due to lower trading volume and higher bid/ask spreads.
Franklin International Core Dividend Tilt Index ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| AD Andrew Dziedzic Prepared Retirement Institute LLC | 152,053 | $5.09M | $6.54M | $1.44M | 28.35% |
| SS Spencer Schwarting Cornerstone Financial Group LLC /NE/ | 8,881 | $277,315.23 | $381,705.38 | $104,434.55 | 37.66% |
| FFL Fortitude Financial LLC Fortitude Financial LLC | 28,960 | $1.13M | $1.24M | $118,591.6 | 10.53% |
| BWM Barnes Wealth Management Group Inc. Barnes Wealth Management Group Inc. | 8,767 | $273,912.18 | $376,805.66 | $102,937.31 | 37.58% |
| AS Adam Scott Argyle Capital Partners LLC | 7,834 | $294,130.59 | $336,705.32 | $42,613.9 | 14.49% |
Franklin International Core Dividend Tilt Index ETF (DIVI) FAQ
What is the stock price today?
On which exchange is it traded?
What is its stock symbol?
Does it pay dividends? What is the current yield?
What is its market cap?
Has Franklin International Core Dividend Tilt Index ETF ever had a stock split?
Franklin International Core Dividend Tilt Index ETF Profile
| ARCA Exchange | US Country |
Overview
The fund described is an investment vehicle that primarily focuses on maximizing dividend returns from markets outside North America. It commits at least 80% of its assets to securities that are part of its benchmark index, as well as depositary receipts linked to those securities. This benchmark index derives from the Morningstar® Developed Markets ex-North America Target Market Exposure Index. A distinct feature of the fund is its optimization process, which is designed to enhance the dividend yield relative to the Parent Index while keeping the tracking error— the divergence between the performance of the fund and its Parent Index—to a minimum. The strategic approach signals a balance between seeking higher income through dividends and maintaining alignment with the overall market performance tracked by the Parent Index.
Products and Services
- Investment in Component Securities
The fund invests a significant portion of its assets in the component securities of its benchmark index. This investment strategy is aimed at reflecting the performance of the index, focusing on developed markets outside North America. By mirroring the index's composition, the fund positions itself to capture the financial performance of a diverse set of companies that are deemed to have a stable and potentially growing dividend payout.
- Investment in Depositary Receipts
Aside from direct investment in securities, the fund also allocates its assets to depositary receipts. These financial instruments represent a specified number of shares (or one share) in a foreign company's stock, allowing the fund to gain exposure to international markets without the complexities of direct investments abroad. This method facilitates broader diversification across different geographic regions and sectors, enhancing the potential for dividend income and growth.
- Optimized Dividend Yield Strategy
The fund employs an optimization process with the objective of securing a higher dividend yield than its Parent Index. This process involves selecting stocks within the Parent Index that have the potential to offer higher dividends without significantly increasing the risk or deviating greatly from the overall market performance the Parent Index represents. This strategy is particularly appealing to income-focused investors seeking to maximize dividend income while still having a balanced exposure to international developed markets.
