Top International Dividend ETF is Worth Considering

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

The appeal of a dividend-oriented strategy is clear and established. A dividend payment not only puts cash in investors’ hands, but it also is a sign of strength if a company can afford to distribute cash to its shareholders. This second point ideally also is accompanied by share-price appreciation to give investors two ways to profit from the same investment.

One fund that is designed to provide both benefits is the WisdomTree Europe SmallCap Dividend Fund (DFE), which is the top-performing international, dividend-paying exchange-traded fund (ETF) so far in 2015.

The index tracked by this international dividend fund uses a system to identify the smallest-cap stocks from a list of European dividend-paying companies. To that end, 85% of its holdings are classified as small-cap stocks. The index contains a total of 417 securities.

Small-cap dividend payers are not the easiest to find, as small-cap firms often need every penny they can muster to grow, but they are out there, as DFE shows. View the current price, volume, performance and top 10 holdings of DFE at ETFU.com.

Year to date, DFE has gained a strong 13.13%, plus dividend payments. Its dividend yield is currently about 2.6%, and the expense ratio for this fund is a modest 0.58%. The fund’s dividend fluctuates somewhat, but not so much as to cause serious worry. DFE usually pays quarterly, with the June payout much larger than the others because of the payout schedules used by many European companies. DFE has a hefty $1.02 billion in assets under management.

DFE_073115

Top holdings for this fund include Holmen (HOLMB), 1.34%; Axis Communications (AXIS), 1.21%; Peab (PEABB), 1.09%; Betsson (BETSB), 0.95%; and Loomis (LOOMB), 0.80%. DFE’s top 10 holdings total only 7.86% of its assets. On a sector-by-sector basis, 27.29% of the fund’s assets are invested in industrials, 19.19% in financials and 16.73% in consumer discretionary companies.

If its recent strong performance impresses you and you also are seeking a way to invest in Europe and small-cap stocks that pay a dividend, WisdomTree Europe SmallCap Dividend Fund (DFE) fits the bill. Remember to look for the current price, volume, performance and top 10 holdings of DFE on ETFU.com.

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Of course, there are many ways to play the dividend game in an ETF, depending on what you are seeking. Next week, watch for my write-up about the second-ranked international, dividend-paying ETF for the first six months of 2015.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my e-letter column from last week about the third-best U.S. equity ETF of 2015’s first half. I also invite you to comment in the space provided below.

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