International Dividend ETFs: A Fiscal Cliff Survival Tool?
An ominous tone set by the fiscal cliff has grown louder since Election Day.
WisdomTree Emerging Markets Equity Income Fund (NYSEARCA:DEM): Emerging markets firms are upping their dividend game this year with the expect payouts from the 300 largest non-bank stocks in the MSCI Emerging Markets Index expected to rise to $52.2 billion $48.9 billion last year.
High profitability and low corporate debt bolster the case for emerging markets dividend payers and ETFs such as DEM. So does the fact US dividend tax policy likely will not factor prominently in the decision of a Polish or Thai company's dividend decisions.
There is another reason DEM could work as a fiscal cliff play: State-owned enterprises. As in some state-owned firms are already decent dividend payers, but since their largest shareholders (the home government) often want more money, there is the potential for dividend growth.
Along those lines, investors should also evaluate the EGShares Low Volatility Emerging Markets Dividend ETF (NYSE: HILO). Both DEM and HILO offer ample exposure to various state-controlled firms.
Global X SuperDividend ETF (NYSEARCA:SDIV): The Global X SuperDividend ETF does devote about 29.3% of its weight to US equities, but many of those are real estate investment trusts that are obligated by law to payout a certain percentage of their profits in the form of dividends. That might not be enough to assuage some investors that SDIV is immune from the fiscal cliff.
Still, SDIV features plenty of positive traits and those traits extend beyond a 7.72 30-day SEC yield and a monthly dividend. SDIV is diverse and less volatile than other international dividend funds. With a price-to-earnings ratio of less than 12 and a price-to-book ratio of 1.14, SDIV is not richly valued.
And while SDIV offers exposure to both developed and developing markets, its eurozone exposure is not significant to be a major cause for concern. SDIV's recent pullback seems appears to be a case of too much too fast and below $21, the ETF is a steal.
Editor's Note: This content was originally published on Benzinga.com by The ETF Professor.
Below, find some more great ETF and market content from Benzinga:
"Call of Duty: Black Ops II" Earns $500 Million in 24 Hours
New Leadership In China Older, Conservative
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.