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Thursday, June 26, 2008

* International ETF Dividend Investing

One area that many portfolios are lacking is international exposure. Most people feel more comfortable buying the companies they are familiar with, which is understandable. However, we still need some exposure to international equities. I too need to bolster my position in non-U.S. equities.


In my Asset Allocation portfolio, I hold IShares MSCI EAFE Index Fund (EFA) as the international component. In my 401(k), there is an international fund that I am invested in. Certain other funds that I own have an international component. The remainder of my exposure comes from holding ADRs of international companies such as BP (BP).

Based on preliminary numbers, my allocation to international equities has increased about 1% from the end of Q1, but it is not where I would like it. To help accelerate the increase I plan on adding an international ETF to my Income ETF portfolio. I am in the preliminary stage of identifying candidates and here are the ones I have on the list to look at (yields as of 6/20/08):

DEB - WisdomTree Europe Div Fund - 2.48% Yield (Annual)
The Fund seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Europe Dividend Index. The WisdomTree Europe Dividend Index measures the performance of companies incorporated in 16 developed-market European countries that pay regular cash dividends on shares of common stock.

DWM - WisdomTree DEFA Div Fund - 1.49% Current Yield (Annual)
The Fund seeks to track the price and yield performance of the WisdomTree Dividend Index of Europe, Far East Asia and Australasia. The Index measures the performance of companies in developed markets outside of the U.S. and Canada that pay regular cash dividends on shares of common stock.

DWX - SPDR S&P International Dividend - 14.42% Current Yield (Quarterly)
The Fund seeks to replicate as closely as possible, before expenses, the price and yield performance of an index that tracks exchange-listed common stocks domiciled in countries outside the United States that offer high dividend yields.

IDV - IShares Dow Jones EPAC Slct Dvdnd IndxFd - 9.18% Yield (Quarterly)
The Fund seeks investment results that correspond generally to the price and yield performance of the Dow Jones EPAC Select Dividend Index. This Index is comprised of one hundred of the highest dividend-yielding securities (excluding REITs) in the Dow Jones World Developed-Ex. U.S. Index.

FDD - First Trst DJ STOXX Slct Dvdnd 30Indx Fd - 4.68% Yield (Quarterly)The Fund seeks investment results that correspond generally to the price and yield of an equity index called the Dow Jones STOXX(R) Select Dividend 30 Index.

PID - PowerShares Intnl Dividend Achievers Ptf - 3.93% Yield (Quarterly)
The Fund seeks to match the performance of the International Dividend Achievers Index by investing at least 90% of its total assets in dividend paying common stocks of this index. This index tracks the performance of dividend paying American Depositary Receipts or ordinary stocks trading on the NYSE, NASDAQ or AMEX.

These will provide a good starting point for additional research. I will provide updates as I move forward with the research.

What securities are you using to provide international exposure?

At the time of this writing I held positions in BP and EFA.


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