Across the Pond, Dividends Tempt

Much is made of the S&P 500’s dividend yield, which recently hit its lowest levels on record. It currently hovers around 1.1%. That makes the average of nearly 2% seen in the decade following the global financial crisis seem attractive by comparison.

The S&P 500’s paltry dividend yield, though good news because it implies the index is rising, is amplified against the backdrop of 10-year Treasury yields flirting with 5%. Fortunately, investors have options for higher levels of income with dividends. Some of those choices don’t require taking on significant risk. Enter the ALPS International Sector Dividend Dogs ETF (IDOG).

IDOG, which turned 13 years old in June, had a trailing 12-month dividend yield of 4.21% as of September 16, or nearly quadruple the comparable metric on the S&P 500. The $573.68 million IDOG is an international ETF. It provides exposure to an array of ex-U.S. developed markets. However, Europe is a source of allure with this fund. With IDOG, European Dividends Intrigue Eight of IDOG’s top 10 country exposures are European nations. That trait can allure because, as some market observers note, the continent’s corporate culture embraces dividends. “Dividend payments are more than just a financial decision in Europe—they’re often a reflection of company philosophy,” according to Saxo. “Unlike the U.S., where share buybacks are the dominant method of returning capital to shareholders, European firms have long prioritised dividend payouts. In several countries—such as the UK, France, Switzerland, and the Nordic nations—stable or growing dividends are embedded in corporate culture.” French and British stocks combine for nearly 27% of the IDOG roster. Meanwhile, the ETF also provides exposure to several Nordic economies.