Higher Yields Are Attracting Investors To ETFs Focused On International Dividend Stocks

Monday, January 24, 2011 07:09
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Higher Yields Are Attracting Investors To ETFs Focused On International Dividend Stocks

Many investors are happy to gain dividend yield by investing in U.S. companies that generate a large share of their revenues via overseas operations. However, more direct purchases can result in higher yields, which could benefit your more adventurous clients.

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Income-seeking investors looking for dividend-paying stocks can gain higher yields by investing directly through ADRs or through ETFs that invest in dividend-paying foreign stocks.


Besides higher yields, the benefits also include diversification of currency exposure and relatively low costs, according to Judy Sarayan, a portfolio manager for several Eaton Vance dividend mutual funds, in this Reuters article.
 

On the negative side, investing in these equities or funds carries currency risks, may require investors to accept dividend payments coming at irregular intervals, and may complicate investors’ tax picture.


If you’re interested in looking further into high-yield global dividend-paying stocks for your clients, Invesco compiles the International Dividend Achievers, a list of overseas stocks that have increased dividends for the last five or more consecutive years. It currently includes 77 companies.
 

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