Wednesday, August 24, 2011

Want Yield? Think International ETFs

These global funds beat their domestic brethren hands down

In the table below, I’ve identified 10 high-yield international exchange-traded funds that easily best the yield earned on the S&P 500. (All yield data is based on the closing value of each fund on Aug. 22.)
As you can see, these 10 selections triple, quadruple and, in one case, more than sextuple the yield of the S&P 500. Let’s take a quick look at the top five yielding funds from this list.

5. WisdomTree International LargeCap Dividend Index

Current Yield: 10.48%
WisdomTree International LargeCap Dividend Index (NYSE:DOL) measures the performance of the large-capitalization segment of the dividend-paying market in the industrialized world outside the U.S. and Canada. The index is comprised of the 300 largest companies ranked by market capitalization from the WisdomTree DEFA Index. Companies are weighted in the index based on annual cash dividends paid. Top holdings include China Mobile Ltd. (NYSE:CHL), Vodafone(NASDAQ:VOD) and Telefonica (NYSE:TEF).

4. WisdomTree DEFA Equity Income Index

Current Yield: 10.62%
WisdomTree DEFA Equity Income Index (NYSE:DTH) measures the performance of companies with high dividend yields selected from the WisdomTree DEFA Index. The fund ranks by dividend yield the companies within the WisdomTree DEFA Index that have market caps of at least $200 million and average daily trading volumes of at least 200,000 for the prior three months. Stocks ranking in the highest 30% by dividend yield are selected for inclusion. Top holdings include Total SA (NYSE:TOT), HSBC (NYSE:HBC) and GlaxoSmithKline (NYSE:GSK).

3. SPDR S&P International Dividend

Current Yield: 10.86%
SPDR S&P International Dividend (NYSE:DWX) seeks investment results that duplicate the performance of the S&P International Dividend Opportunities index. The fund invests at least 80% of assets in securities that comprise the index. Top holdings in the fund include European telecom firm Tele2 Ab, Brazilian telecom giant Telesp Tel Sao Pau and Australian stock market operator ASX Limited.

2. First Trust STOXX Euro Select Dividend Index

Current Yield: 11.16%
First Trust STOXX Euro Select Dividend Index (NYSE:FDD) seeks investment results that track the equity index called the STOXX Europe Select Dividend 30 Index. The fund normally invests at least 90% of assets in common stocks that comprise the index or in depositary receipts representing securities in the index. The index consists of 30 high dividend-yielding securities selected from the STOXX Europe 600 Index. Top holdings include three London-based companies: Provident Financial, the Catlin Group and Scottish & Southern Energy.

1. WisdomTree Europe SmallCap Dividend Index

Current Yield: 16.54%
WisdomTree Europe SmallCap Dividend Index (NYSE:DFE) is pegged to the small-cap segment of the European dividend-paying market. The index is comprised of the companies that compose the bottom 25% of the market capitalization of the WisdomTree Europe Dividend Index. The companies are weighted in the index based on annual cash dividends paid. Top holdings include Belgium property investment group Cofinimmo, Spanish television company Antena 3 de Television SA and Swedish construction firm NCC AB.
As you can see, there are big yields out there in nearly all corners of the globe. So, if you’re dissatisfied with the small yield paid on stocks in the S&P 500, then maybe it’s time to start thinking internationally.

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