Investors are looking to balance concentration risk and returns amid brewing anxiety about U.S. stocks. While the push and pull of Middle East diplomacy continues, A.I. concerns remain as many investors are heavily invested in just a few AI hyperscalers. International equities offer diversification and performance in funds like the Franklin International Dividend Booster Index ETF (XIDV), which is beating its category average and benchmark.
Key Takeaways:
- With just a handful of stocks driving about 40% of S&P 500 movement, diversification has a big role to play.
- The international equity ETF space can provide just that via funds like XIDV, up 18.55% YTD.
- The strategy has also done well this month, beating its ETF Database category average over the last month.
XIDV charges a 19 basis point (bps) fee to track the VettaFi New Frontier International Dividend Select Index. The fund includes large and midcap developed markets names. XIDV looks to offer a high dividend yield balanced against the volatility in the broad international equity space.
The index looks to limit weights for individual stocks to 2.5% and sectors and countries limited to 30%. Per ETF Database data, the fund is heavily allocated to Europe, led by France, Italy, and the U.K. Japan, Canada, and Australia take up some of the largest weights outside of Europe.
International Equities ETF XIDV: What to Watch
The international equities ETF has taken that approach and produced some strong returns. XIDV has returned 7% over the last month according to ETF Database data. That has outperformed the ETF Database Global Equities category average in that time. The average has returned just 0.2% in the last month.
Meanwhile, XIDV has also outperformed its benchmark, of late. Per Franklin Templeton data, the ETF’s index, the VettaFi Developed World ex United States Index has returned 11.5% YTD. XIDV has, by contrast, returned 18.55% YTD according to ETF Database data.
Together, that paints a picture of a solid international equities ETF offering. The fund’s 19 bps fee is on the lower side, making it an intriguing satellite ETF offering. It’s also provided a 15.7% NAV distribution rate as of July 31st.
See more: How Autism Research ETF ASD Can Deliver for Your Portfolio
Looking ahead, its diversification across Europe and Asia can appeal, diversifying within the ex-U.S. space. Furthermore, its combination of energy minerals and more defensive segments like finance can diversify it even more, boosting its overall case. For those looking at the space, XIDV can appeal.
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VettaFi LLC (“VettaFi”) is the index provider for XIDV for which it receives an index licensing fee. However, XIDV is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of XIDV.
