First Trust ETF Joins the Hunt for Foreign Dividends
Amid surging popularity for
FGD is similar to ETFs from several different providers: iShares EPAC Select Dividend Index Fund (IDV), PowerShares International Dividend Achievers (PID) and the WisdomTree DEFA High Yielding ETF (DTH).
Like all of those funds, FGD is heaviest in financial stocks -- but, at 34.84% weight, it is the lightest of the four. (The S&P 500 has 18.66% in financials.) FGD generally has evenly spread exposure to the other sectors, but no technology. It also has one very noticeable quirk compared to the other funds: a very large 15.22% in the utility sector, compared to single-digit weightings for the other funds. It makes sense in that utilities usually pay high dividends, but it does add risk in that utilities tend to be interest-rate sensitive, and a dramatic rise in rates could cause FGD to lag its competitors.
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