Some investors have the time to scour the globe for individual stocks with high yields and noteworthy fundamentals, but not everyone has the investing wherewithal to entertain such a project, and even if time weren't a factor, they'd much prefer to go to the beach.
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For that reason, the international dividend fund was created; it's a fund managed by professionals that focuses, in general, on companies that offer investors a secure and healthy yield on their money. Below we offer the results of our own bit of scouring: three high-paying, international dividend ETFs for your immediate consideration. (For a primer on ETFs, take a look at How To Use ETFs In Your Portfolio.)
Extraordinary European Distributions
The WisdomTree Europe Total Dividend Fund (NYSE:DEB) pays a huge 11% distribution and is trading 50% higher than its March lows at $25. Among the fund's top holdings are two banks - Banco Santander (NYSE:STD) and HSBC Holdings (NYSE:HBC) - and four energy companies - British Petroleum (NYSE:BP), Total SA (NYSE:TOT), Eni SPA(NYSE:E) and Royal Dutch Shell. Overall, DEB's holdings are heavily weighted in financials (18.50%) and energy stocks (14.44%). Geographically, nearly one-third of the fund's holdings are allocated to the United Kingdom.
WisdomTree's Europe Total Dividend Fund has a management expense ratio of 0.48%.
Dividends From Smaller Companies
The Claymore/Zacks Multi-Asset Income Index ETF (NYSE:CVY) pays about a 5.7% annual distribution and is up 80% in just the last four months. The fund aims to match the results of the Zacks "Yield Hog Index", which is comprised of roughly 140 small- and mid-cap global companies.
Top holdings in CVY include Linn Energy LLC Units (NASDAQ:LINE), Bank of America Corp Preferreds and Whirlpool (NYSE:WHR). The fund is generally heavily weighted in the financials (26.25%) and utilities (20.14%) and is overwhelmingly geographically focused toward the U.S. (78.2%).
CVY has a management expense ratio of 0.60%.
Japan is the World
The WisdomTree Japan High Yielding Equity Fund (NYSE:DNL) has recently changed its name to WisdomTree World ex-US Growth Fund. Either way, the fund pays a 4.8% annual distribution and is up 30% from its 52-week lows set in March of 2009. Top holdings in DNL are energy producers BP and Royal Dutch Shell, and global mining giant BHP Billiton (NYSE:BHP). Well over one-third of the fund's assets are concentrated in the energy sector (37%), and nearly 40% are devoted to U.K. companies.
DNL charges a management fee of 0.58%.
The Wrap
Investors interested in dividends need not restrict themselves to individual companies or American stocks. The three international dividend ETFs covered here actually offer higher payouts than domestically focused funds, and come with the added benefit of improved portfolio diversification. (See The Importance of Dividends to learn more about this staple of portfolio return.)
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