Published Fri, 24 Nov 2017 03:00:33 -0500 on Seeking Alpha
In addition to buying emerging markets index funds and global market-cap weighted index funds, I'm stocking up on the iShares International Select Dividend ETF (IDV) and this article explains why.
Mean Reversion and International Diversification According to a recent article on CNBC, international markets make up 60% of global public capital markets, but only 21% of U.S. investors' portfolios.
Ben Carlson, the Director of Institutional Asset Management at Ritholtz, has a great set of performance data on this subject. Here's his chart of the performance of European, Pacific, and U.S. stocks over a 44-year period:
Source: Ben Carlson, How Much International Diversification is Necessary?
Although there is a moderate degree of correlation, some regions vastly outperformed other ones during certain decades. And he found that if you had invested in all three equally during this period with annual re-balancing, you would have earned a 10.6% annual return, a slightly higher figure than any of the three alone. And with less volatility overall.
The easiest way to benefit from this is to invest globally and re-balance your portfolio annually or whenever you drift away from your target allocations.
But another way is to overbalance - to specifically invest more in regions that are set to potentially offer superior returns, usually due to comparative undervaluation.
Global Returns, Last 10 Years Here are the returns of the SPDR S&P 500 ETF (SPY), the... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|ISHARES DOW JONES INTERNATIONAL SELECT DIVIDEND INDEX FUND||33.92||0.0||0.00||0.00||0.00|
Older articles featuring Ishares Dow Jones International Select Dividend Index Fund (IDV):Beyond Dividends: Beating The Market With Shareholder Yield
March's Best And Worst 15 CCC Stocks With Market Caps Greater Than $20 Billion And Yield Greater Than 2%
The Case Of International Dividend ETFs
Managing Momentum Portfolio Using Diversification Through Dividend ETFs
International Dividend ETFs For High Yield Seekers
iShares Adds Another Solid Dividend ETF To Its Lineup
New International Dividend Growth ETF By iShares In Focus
Inside WisdomTree's New Dividend Growth ETF
Yield Sprouting From 'Dividend Stumps'
Vanguard Rolls Out 2 Global ETFs That Focus On Dividend