First Trust ETF Joins the Hunt for Foreign Dividends
FGD should yield 4.34% (4.94% index yield minus the 0.60% expense). The back test numbers are impressive, as they always are, for higher returns with less volatility than the broad market. The underlying index has averaged 25.17% annualized for five years.
Stocks in the fund meet several screens, including dividends paid being greater than or equal to the company's five-year average. Constituents must also satisfy stringent payout ratio and trading volume rules.
FGD strikes me as being well diversified compared to similar funds, so it might be less reactive -- though not immune -- to typical sector or single-country blowups.
The financial sector is on shaky ground, impacting the direction now. I think that will be the case until the entire yield curve normalizes. Its weight in the UK could also be a drag, as that economy is showing signs of weakening from its own exposure to the housing saga.
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