SPDR Global Dow ETF (DGT)
PG Stock Weighting: 0.65%
I chose the SPDR Global Dow ETF (DGT) for two reasons: First, it allocates 55% of its $102 million in total net assets outside the U.S. Secondly, it’s equal weighted, meaning PG stock gets the same allocation as the other 149 stocks in the portfolio when reset every September.
I’m a fan of equal-weighted ETFs because the allocation methodology allows for profit-taking, unlike market cap-weighted ETFs where the top holdings become an increasingly bigger part of the portfolio ratcheting up the risk if a broad-based market correction were to take place.
There are definitely pros and cons to equal-weighted ETFs, but there is no argument that they provide a more democratic form of investment, if not a cheaper one. At 0.50% annually, it’s a lot to pay for DGT’s mediocre performance. But before you toss this one in the garbage remember that Europe (just now recovering from a recession) represents 31% of the portfolio’s weighting and will likely see a second year of superior returns in 2014. Not to mention income investors will like the 2% SEC-yield.
Its 13-year operating history combined with a small asset base indicates that investors have ignored this global fund in favor of more popular options like the Vanguard Total World Stock ETF (VT), or the previously mentioned IOO. While it might not be my first choice to gain exposure to PG stock, it’s certainly worth considering.
As of this writing, Will Ashworth did not own a position in any of the aforementioned securities.