PowerShares International Dividend Achievers Portfolio: Low Risk ETF With Emerging Market Exposure NASDAQ:PID

Investments focused in a particular industry or sector are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments. ETF Database analysts have a combined 50 years in the ETF and Financial markets, covering every asset class and investment style. The team monitors new filings, new launches and new issuers to make sure we place each new ETF in the appropriate context so Financial Advisors can construct high quality portfolios. The information on this site does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial advisor/financial consultant before making any investment decisions. Investments focused in a particular industry or sector are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.

Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through September 4, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations.

The Industrials sector should disproportionately benefit from this provision, and PFM’s exposure to it is less than a popular alternative fund. Imagine that a stocks’ how to choose stocks for long term investment price-to-earnings ratio rises from 10 to 20 while earnings do not change. In the real world, paying twice as much for the same thing is not a ‘good deal’.

  • The last holding I will discuss is Delhaize Group (DEG), which is a Belgium based food retailer, however individuals may recognize this as the company that owns Food Lion and/or Bloom.
  • PID’s management invests the funds capital in a wide variety of sectors including telecommunication services, energy, financials, consumer staples, consumer discretionary, healthcare industrials and materials.
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  • Also, the Dividend Achievers index does not increase ownership in businesses that have seen their market caps decline.
  • Investments focused in a particular industry or sector are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.

On a regional basis, North American dividends rose 15% to $392 billion, but the U.K. Payouts there surged 31% to $135 billion, according to Henderson Global Investors. The index’s membership is reconfigured every January, says Joe Becker, of Invesco PowerShares.


PID can also be a useful tool for investors who believe dividend payers have become undervalued, or are poised to outperform their growth counterparts in the current environment. While PID maintains some emerging market exposure, it consists primarily of ex-U.S. Developed market stocks, and as such has potential appeal as an alternative to funds like EFA or VEA in a buy-and-hold portfolio. PID holds only a fraction the number of stocks that VEA or EFA contain, resulting in greater single security concentration.

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  • Another area that does not excite me about PFM is its energy exposure, with two of the top six holdings residing in that sector.
  • PFM has performed strongly since the recession, as its focus on dividend growth was a popular strategy with interest rates at historically low levels.
  • This ETF has heaviest allocation to the Consumer Staples sector–about 18.30% of the portfolio.

Distributions in cash may be reinvested automatically in additional whole shares of the fund only if the broker through whom you purchased shares makes such option available. Like the MSCI EAFE fund, PID has heavy exposure to Financials (Figure 2), but in terms of country exposure the two differ markedly. Companies, PID has considerable exposure to Canada whereas EFA has virtually trading 212 forex broker review none. Meanwhile EFA is heavily invested in Japan while PID’s exposure is limited (23% vs. 3%). Lastly, PID offers some exposure to emerging markets (about 9%) while EFA has none (that’s not a criticism; EFA isn’t designed to have emerging markets exposure). PID offers ample exposure to many of the blue-chip laden sectors dividend investors favor when mining for U.S. income stocks.

PID Price vs Flows AUM Influence Charts

And you’ll find all of them in PowerShares International Dividend Achievers ETF and the benchmark it tracks, the International Dividend Achievers index. This is a South American company, but I’m not sure why anyone would buy a utility with a P/E of 29.2 and a yield of 2.8%. Since the materials, information technology, and utilities together account for 7% of the holdings of this ETF, I will just choose 1 stock among them. This mining stock has been hit hard lately and it could be a nice time to get in. In consumer staples my choice would be British American Tobacco (BTI).

While the ETF surprisingly features no exposure to Australia, one of the highest-yielding developed markets, the fund’s other international weights indicate it has legitimate dividend growth potential. PowerShares is the branded name of a family of domestic and international exchange traded funds (ETFs) managed by the investment management company Invesco Ltd. One of the first popular index ETFs, the PowerShares QQQs, which tracks the Nasdaq 100 index, launched in 1999.

Alternative ETFs in the FactSet Equity: Global Ex-U.S. – Total Market Segment

Given that 2017 was a strong year for dividends across the board, PFM’s drop in payout is a red flag for me personally. PFM has a higher expense ratio, but before running historical performance numbers I would have expected PFM to outperform SPY. With equal weighting, if a company’s price-to-earnings ratio falls by 50%, the fund will have to buy more to keep weights equal. Similarly, an equal weighted fund will have to sell when the price-to-earnings ratio of a business rises to keep the fund equally weighted.

Top ETF Stories of Q1 Worth a Watch in Q2

This is important to highlight because the Industrials sector is one that I expect to out-perform in 2018, on the backdrop of a growing economy and positive tax developments. This will benefit industries and companies review the signal and the noise that utilize a lot of heavy machinery and other expensive equipment. It also gives them an incentive to upgrade equipment and factories now, because they will be able to realize the full tax benefit immediately.

They are fairly diversified in the communications business and provide cable, Internet, and phone services in Canada and the US. I think Tim Hortons (THI) is an interesting choice – P/E 20.76 and yield 1.9%. But personally I think their coffee is horrible, and I don’t think they deserve to trade at a higher multiple than McDonalds (MCD).

I mentioned VIG earlier in the article when I discussed dividend growth. Aside from having a slightly higher yield and steadier increases, it has an overall higher total return. The difference in yield may be negligible, but over the past year VIG has seen a total return close to 18%, while PFM’s total return is under 12%.

The index is computed using the net return, which withholds applicable taxes for non-resident investors. Zacks proprietary quantitative models divide each set of ETFs following a similar investment strategy (style box/industry/asset class) into three risk categories- High, Medium, and Low. The aim of our models is to select the best ETFs within each risk category, so that investors can pick an ETF that matches their particular risk preference in order to better achieve their investment goals. Although PID has limited trading history (it was listed September 15, 2005), both the International Dividend Achievers index and the MSCI EAFE index have lengthy published histories to compare. A prior study we did examining ten years of index returns through June 30, 2005 showed the Dividend Achievers index strategy produced a total annualized return of 10.6%, compared with 5.6% for the MSCI EAFE index (Figure 3). How many companies based overseas have boosted their dividends in each of the past five years and trade on Nasdaq or the New York or London stock exchanges?

I’m not saying these large holdings don’t make good dividend investments. Market cap has virtually no sway in determining the best Dividend Achievers. The problem with market cap weighting is that it is the opposite of value investing. It is comprised of 50 stocks with 50+ years of consecutive dividend increases. The Dividend Aristocrats Index is comprised of 67 stocks with 25+ years of consecutive dividend increases. It is one of the best sources to find high-quality dividend growth stocks.

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