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iShares International Select Dividend ETF: Diversify With 5.8% Yield, But Watch For FX Risks

Published Fri, 18 Oct 2019 04:59:35 -0400 on Seeking Alpha

The iShares International Select Dividend ETF (NYSE: IDV), with $4.32 billion in total assets, is one of the largest exchange-traded funds focusing on foreign dividend-paying stocks. In this case, the exposure is to high yield stocks in developed market globally. By this measure, the fund naturally has a value type tilt and avoids growth type stocks that typically do not pay a dividend. IDV currently yields 5.8% through a quarterly dividend. Investors could consider adding a position to diversify an existing income portfolio. We highlight that the performance of the fund has been relatively weak in recent years based on a challenging environment, including a strong U.S. dollar pressuring the returns of foreign stocks. This article presents IDV and our view on where the fund is headed next.

(Source: Finviz.com)
Fund Composition
From covering a large number of exchange-traded funds from various fund sponsors and investment managers, one our frustrations is the sometimes confusing naming conventions. In this case, IDV is indeed an "international" ETF but is only including developed market companies, and apparently excludes Japan. iShares indeed makes it clear that IDV is based on "high dividend-paying equities in non-U.S. developed markets", but to us the word "international" should be more inclusive. The idea is that the countries considered developed typically have higher sovereign credit ratings, and thereby, are lower-risk in terms of geopolitical considerations.... Read more


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