Dividend funds haven’t fared all too well the past month, but many have outperformed the broader market this year.
Those showing some of the biggest gains are outside the U.S., as shown in the accompanying chart. In fact, the top nine ETFs track non-U.S. markets. The first U.S. play, WisdomTree U.S. Quality Dividend Growth ( DGRW ) comes in 10th.
[ibd-display-video id=2029744 width=50 float=left autostart=true]Topping the list for year-to-date returns through July 11 is WisdomTree Europe SmallCap Dividend ( DFE ), which is shaping a flat base with a potential buy point at 66.98. The $935.1 million fund invests in dividend-paying small-cap companies primarily in developed European countries.
As of July 13, the U.K. accounted for the biggest weighting, at 27% of assets, according to Morningstar Inc. London-based telecom services provider TalkTalk Telecom Group, private equity firm Aurelius Equity Opportunities (Germany) and IT services provider Tieto (Finland) were among its top holdings.
[ibdchart symbol=”DFE” type=”daily” size=”threequarter” position=”leftchart” /]
DFE has outperformed the MSCI ACWI Ex USA Index year to date, as well as based on three, five and 10-year average annual returns. It offers an annualized yield of 2.8% vs. the S&P 500’s average 1.9% payout. The expense ratio is 0.58%.
Up next is iShares Emerging Markets Dividend ( DVYE ). The $321.7 million fund, which tracks the Dow Jones Emerging Markets Select Dividend Index, is near a 41.40 flat-base entry.
Taiwan accounted for its biggest sector weighting, 26%, followed by 14% in China and 11% each in Russian Federation and Thailand. Brazil and South Africa made up about 9% and 6%, respectively.
DVYE has outpaced MSCI ACWI Ex USA for the YTD and one-year periods, but has lagged over the three- and five-year periods. Its dividend yield is 3.6% and it carries a 0.49% expense ratio.
The first non-Europe or emerging markets play is WisdomTree Japan SmallCap Dividend ( DFJ ), in fifth place. The $494.9 million fund has regained its 50-day moving average as it builds a flat base with a 71.78 buy point .
[ibdchart symbol=”DVYE” type=”daily” size=”threequarter” position=”leftchart” /]
Biggest sector weightings as of July 13 were industrials, 24%, consumer cyclical 23% and basic materials 13%. Top holdings included Sankyo, a maker of pachinko gambling devices, financial services provider SBI Holdings and Yokohama Rubber.
It’s underperformed MSCI ACWI Ex USA with a 14.2% YTD gain vs. the index’s 16.1% return. But DFJ has beaten the index over the one, three, five and 10-year periods. It yields 1.8%; the expense ratio is 0.58%.
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