Look for overseas opportunities with international dividends
Rising rates can certainly give fixed income investors headaches, especially when they are already dealing with historically low yields at the same time. One place to look for more income is overseas with international opportunities.
Besides, dividends are also an option other than relying on bond income. Global stocks rebounding from the economic effects of the pandemic mean more companies are raising their dividend yields or restarting them if they were shut down.
International dividends, in particular, performed very well compared to those in the United States
“Dividends paid by U.S. companies rose 3.5% in 2021, a solid improvement over the prior year, but lagging behind the increases seen in many other regions,” notes an article by Baron. “Global dividends totaled $1.47 trillion last year, up nearly 17% from 2020 levels.”
An international dividend ETF investors can enjoy
Moreover, it is necessary to not only offer the highest dividend yield, but to allow for future growth. That said, investors will literally appreciate the Vanguard International Dividend Appreciation Index Fund ETF Shares (VIGI).
VIGI seeks to track the performance of the Nasdaq International Dividend Achievers Select Index, which measures the investment performance of non-US companies that have a history of increasing dividends. The index focuses on high quality companies located in developed and emerging markets, excluding the United States, which have both the ability and the commitment to grow their dividends over time.
In addition, the manager attempts to track the target index by investing all or substantially all of its assets in the broadly diversified collection of securities that make up the index, holding each stock in approximately the same proportion as its weighting in the index.
- Seeks to track the performance of the NASDAQ International Dividend Achievers Select Index.
- Provides a convenient way to gain exposure to developed and emerging non-US equity securities from around the world that have a history of increasing dividends.
- Uses a passively managed full replication strategy.
- Has a low spend rate of 0.15%.
For more news, insights and strategy, visit the Fixed Income Channel.