5 Hot Global Dividend ETFs

As Irma hit Florida with less-than-expected intensity and North Korea took a breather from serial missile launches, global stocks took an upturn. Even though the United Nations put further sanctions on North Korea, global stocks were steady in recent trading.

With this the S&P 500 hit an all-time high and Dow Jones returned to its 22,000 level. Yield on 10-year U.S. Treasuries rose to 2.17% on Sep 12 from 2.05% seen on Sep 7. While the U.S. market can be played to cash in on this surge, we believe international economies are no less lucrative.

Several foreign economies, especially Europe, were off to a great start this year. The Eurozone economy grew 0.6% sequentially in the second quarter, in line with the preliminary estimate above 0.5% growth in the previous period.

Though the IMF recently lowered its global growth forecast for this year and the next from 3.1% to 2.9% and 3.8% to 3.6%, respectively, the rates are still at multi-year highs. It now expects emerging economies to grow 4.5% this year, 0.5 percentage points lower than its prediction in July. But investors should note that this 4.5% growth rate is still higher than 3% logged by the U.S. economy in the second quarter.

Why to Pick High-Dividend Securities

As the equity markets have rebounded, bond yields should soar higher. In such a scenario, investors may be interested in equities that have potential to offer capital appreciation as well as benchmark-beating yields. After all, dividends are one of the ways to ride out the turbulent times. Even if the stock or the fund falls, higher current income would go a long way in protecting investors’ total returns.

Plus, there is heightened speculation over the European Central Bank’s (ECB) possible announcement of the QE wind down as soon as in October. If this happens, bond yields in the Eurozone may shoot up.

Across the pond, the Fed is also due for a planned rate hike. The U.S. central bank is also considering a reverse QE or unwinding of its $4.5 trillion-balance sheet. It is subdued inflation that is keeping the Fed from being very aggressive currently.

So, investors must be in search of high dividend ETFs that offer benchmark-beating yields. We thus have zeroed in on some global high-dividend ETFs. We broadened our vision to the global level given that several international economies are looking up currently.

Global X SuperDividend ETF (SDIV - Free Report) – Yields 6.59%

The fund is heavy on the United States with about 46.2% exposure, followed by Australia (12.3%) and Singapore (6.5%).

SPDR S&P International Dividend ETF (DWX - Free Report) – Yields 4.91%

The fund has focuses across Canada (14.15%), the United Kingdom (13.85%) and Australia (11.85%).

Guggenheim S&P Global Dividend Opportunities Index ETF (LVL - Free Report) – Yields 3.99%

The fund is heavy on the United States with about 46% exposure, followed by the United Kingdom (9.3%) and Australia (8.6%).

First Trust Dow Jones Global Select Dividend Index (FGD - Free Report) – Yields 3.92%

Australia, the United States, France, Canada and the United Kingdom have a double-digit weight in the fund.            

PowerShares International Dividend Achievers (PID - Free Report) – Yields 3.55%

The fund is heavy on Canada (35.19%) followed by the United Kingdom (26.02%), Russia (8.16%) and Hong Kong (5.0%).

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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