Three Global Dividend ETFs with 7% Yields

Risk and returns often go hand-in-hand, and income hunters who are willing to stomach a little more risk can look overseas for attractive dividends in globally focused exchange traded funds.
With the Federal Reserve depressing yields on U.S. government bonds, investors have branched out to riskier investments for yields.

“What we have is money that had typically gone to fixed income now coming into equities,” Chris Wallis, chief investment officer of Vaughan Nelson Investment Management, said in a Wall Street Journal article. “They’re looking for bond substitutes and it doesn’t mean that the money is going to exit and go either to cyclical stocks or go to cash. I think it’s going to stay where it is.”

For starters, the Global X SuperDividend ETF (NYSE: SDIV), which tracks the performance of 100 equally weighted companies with some of the highest dividend yields in the world, comes with a 7.67% 12-month dividend yield. The fund is up 11.3% year-to-date.

Regional breakdowns include North America, Latin America, U.K., Developed Europe, Emerging Europe, Australasia, and developed Asia. The fund is primarily composed of developed market stocks at 92.8% of the portfolio, and a 7.2% allocation toward emerging markets.

The SPDR S&P International Dividend ETF (NYSE: DWX) also offers an attractive 7.35% dividend yield. The fund tracks mostly non-U.S. mid-cap companies as it weights holdings by dividend yield. The ETF is up 5.1% year-to-date.

DWX has a 15.3% exposure to emerging markets and 84.7% to developed markets.

However, the high yields do not come without risks.

“It gives the most portfolio weight to the companies with the highest yield, which boosts income but can be risky during times of market distress,” according to Morningstar analyst Abby Woodham. “During such periods, high-yielding companies are the unloved bunch, and can trade at a significant discount to their fundamental fair value.”

The Guggenheim S&P Global Dividend Opportunities Index ETF (NYSE: LVL) offers a 7.12% 12-month yield. The ETF is comprised of American depositary receipts, or “ADRs,” that offer high dividend yields. The ETF is up 5.3% year-to-date.

Country allocations include 85.1% of the portfolio allocated toward developed economies and 14.9% in emerging markets.

Source:  Tom Lydon, ETF Trends

Global X SuperDividend ETF (NYSE: SDIV) is a component of the D2 Capital Management Multi-Asset Income Portfolio.

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

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