Global High Yield Dividend ETFs


In a global economy, today’s investors need exposure to international equities to take advantage of the growth and dividend income that they provide. Global High Yield Dividend ETFs provide a great way to invest in international equities without the elevated risk of unknown individual corporations in oversea markets. A lot of international equities pay a handsome dividend and provide fantastic investment returns, so an investor who does not have access to buy them directly can gain access to these corporations via the following ETFs.

In my hunt to increase my current income coupled with a need for global diversification, I started exploring options for International Dividend ETFs. The largest and most popular ETFs with the juiciest yield are listed below. All holdings in the funds discussed below are in equities.

  1. Global X SuperDividend ETF (SDIV) tracks the performance of 124 equally weighted companies that rank among the highest dividend yielding equity securities in the world.
  2. Guggenheim S&P Global Dividend Opportunities Index ETF (LVL) is comprised of 101 common stocks, MLPs and ADRs that offer high dividend yields chosen from countries included in the S&P Broad Market Index. The constituents consist of stocks, MLPs and ADRs with market cap greater than $1.5B.
  3. SPDR S&P International Dividend ETF (DWX) includes 116 companies with a biased weighting towards mid-to-large cap.
Fund Name
Ticker  MER
%
Yield
%
No of

Holdings

Market Cap Breakdown
Mega-Large-Mid-Small-Micro
%
Global X SuperDividend ETF SDIV 0.58 6.55 124 9.2 – 17.2 – 45.1 – 19.5 – 5.14
Guggenheim S&P Global
Dividend Opportunities Index ETF
LVL 0.60 6.52 101 10.1 – 24.6 – 50.6 – 12.8 – 1.75
SPDR S&P International Dividend ETF DWX 0.45 6.76 116 15.2 – 33.73 – 43.47 – 2.05 – 0

Geographic Allocation

SDIV has a slight inclination towards equities based in the US with a 27% allocation. The other two funds have highest fund allocation in Australia with DWX completely invested in non-US equities. All funds have the highest regional allocation to Europe with SDIV at 32.59%, LVL at 35.14% and DWX at 39.93%.
ETF
 US / Intl
Allocation

%
 Developed / Emerging

%
Top Allocation
 SDIV 27 / 72 94.34 / 4.06 USA (27%)
LVL 16 / 83 86.89 / 13.07 Australia (20%)
DWX 0 / 99.85 83.31 / 14.44 Australia (22%)

 

Sector Allocation

SDIV’s largest sector allocation is in Real Estate. Both LVL and DWH have largest sector allocation in Communication Services. For the most part, LVL and DWH have very similar sector weightings.
Sector
 SDIV

%
 LVL

%
 DWH

%
Financials 19.05 15.23 14.73
Industrials 9.79 9.73 12.17
Materials 2.8 6.51 4.92
Energy 5.13 12.79 12.59
Real Estate 21.76 9.6 9.01
Cons Cyclical 5.34 6.71 6.13
Cons Defensive 2.67 4.42 1.41
Comm Services 11.62 18.37 17.51
Technology 2.68 0 0.66
Healthcare 4.81 3.12 2.75
Utilities 12.74 13.48 14.23

Metrics To Judge By

Metrics such as sector allocation, number of holdings, expense ratio fees, annual yield, market cap size exposure etc need to be considered before I make a final decision on the ETF to pick.
  • Number of holdings: When investing in ETFs, I like broader indices and look for more holdings as I like to mitigate risk. SDIV has the highest number of holdings with 124 equities in total. Winner: SDIV.
  • MER: I like to keep my costs down – simple as that. Winner: DWX.
  • Yield: I have already dropped a couple of names from this list of global dividend ETFs yielding less than 2%. Since most of the funds yield the approximately same, this will be a tie on the yield metric Winner: Tie.
  • Geographic Allocation: I am already invested in a lot of US stocks and the point of this exercise is to look for international diversification, I would want higher more non-US exposure. Winner: LVL and DWX.
  • Sector Allocation: I like more balanced funds. SDIV is very concentrated in Financials with an allocation of almost 40% Financials + Real Estate. Winner: LVL and DWX.
  • Distribution frequency: I like to see the distributions paid out frequently. SDIV pays on a monthly schedule whereas LVL and DWX pay on a quarterly schedule. Winner: SDIV.
  • Stable Income: The objective of this exercise and the potential holding needs to provide a stable income stream. Although all funds have the same annual yield rate, SDIV is the only fund that has the same stable payment month after month. Both LVL and DWX have a variable pay amount for each quarter. Winner: SDIV.

Final Score: Based on the metrics above, giving a point for each metric we get: SDIV = 4. LVL = 3. DWX = 4.

I am still undecided which one offers the best rewards, but I like DWX even though it loses on the points of # of holdings, distribution frequency and stability of income, the ETF has the lowest fee, good geographic allocation with a decent exposure to emerging markets (which SDIV lacks) and the overall sector allocation.

What do you think of these Global High Yield Dividend ETFs? Do you own any of these ETFs in your portfolio? What are your thoughts on the metrics discussed above? I would love to hear your thoughts on these ETFs. Leave a comment below to start a discussion.

Disclosure: None. My full list of holdings can be found here.This article first appeared on roadmap2retire.com


Image Source: freedigitalphotos.net

Chatter Around the World – 35

Chatter Around the World is a weekly link update of economics, investing, dividends and personal finance articles that have caught my eye. In these weekly updates, I also capture my blog updates and news related to my holdings.

New Blog Posts

Let dive into the links that caught my attention this week.

Updates from My Portfolio Holdings

General Reads

Dividend Reads

Dividend Stock Analysis

Have a wonderful weekend.

The Real Winners of In-Car Entertainment

We are on the verge of in-car entertainment (ICE) going mainstream. Apple (AAPL) recently announced the release of CarPlay, its iOS vehicle integration at the Geneva International Motor Show, which allows an iPhone to take over the in-dash display of the car, providing Siri voice controlled access to aspects such as navigation, phone functions, messages and music. CarPlay will be first accessible from manufacturers such as Ferrari, Mercedes-Benz and Volvo, and is slated to release for other car manufacturers later this year.

Google (GOOG) has announced that it is forming partnership with Audi, GM (GM), Honda (HMC), Hyundai and chipmaker Nvidia (NVDA) called an Open Automotive Alliance. The alliance is aimed at developing ways of integrating the search engine giant’s Android operating system into cars to make driving “safer, easier and more enjoyable for everyone.”

To read the full article, click here.

Where Will Qualcomm’s Growth Come From?

Qualcomm (QCOM) designs, develops, manufacturers and markets digital communication products. Qualcomm’s business segments include mobile device chipset manufacturing, mobile device royalties and strategic investments. Qualcomm is the leader in ARM-based chipset processors which can be found in the bulk of Android (GOOG), BlackBerry (BBRY) and Windows (MSFT) mobile devices. The licensing segment is used by almost all mobile device manufacturers including Apple (AAPL). Considering that 1 billion smartphones were shipped last year, the real winner from the smartphone wars really is Qualcomm. Qualcomm charges royalties on each handset sold based on its technology and one time licensing fees from handset vendors to use its proprietary technology.

Competition And Risks

  • On the technology front, Qualcomm competes with GSM mobile phone technology, which is wildly prevalent outside North America and is an open source technology.
  • As the world moves from 3G to 4G (LTE/WiMax), Qualcomm has lost some of the hefty royalty pricing power on OFDMA-based LTE technology as it commanded on CDMA technology.
To read the full article, click here.

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