Large-Cap International Dividend ETFs: SPDR International Dividend ETF (DWX)
When diversifying beyond the U.S., especially if it’s your first time wading into the global pool, it’s wise to go with bigger, more established companies that will be sure to continue paying dividends.
To keep things simple, I’ll want to cover as much ground with one of these dividend ETFs as I possibly can. As a result, the expense ratio becomes less of an issue. Paying an extra 10 or 20 basis points if it gets you the entire world seems like a fair exchange.
The SPDR International Dividend ETF (DWX) has been in existence for almost six years. In that time, it has produced a five-year annualized total return of 15.03% through Dec. 4 — 124 basis points greater than its MSCI EAFE benchmark. With a 30-day SEC yield of 6.4%, it’s getting almost half its performance from dividends.
The weighted average market cap of its 95 holdings is $10 billion, far less than the $35 billion for its benchmark. If you absolutely must own large-caps only, this might not be for you. However, I view mid caps as the sweet spot when it comes to investing for the long-haul. And with an expense ratio of 0.45%, I think investors are getting a very good deal.