Under The Hood: Small Fund, Big Yield? (DWX, DVYA, AUSE)

The deluge of new dividend ETFs has been an oft-lamented theme for close to a year. Maybe longer and that makes sense. In an environment where investors are starved for yield, there are now scores of ETFs that help investors generate the income they so badly crave with dividend yields that are far more robust than the S&P 500 or U.S. Treasuries. More dividend ETFs means more choices for investors and that's a good thing, but with so many dividend ETFs popping up, there are bound to be a few that slip through the cracks and go unnoticed. It's even possible that some unnoticed new dividend funds come courtesy of large ETF sponsors. One example is the iShares Asia/Pacific Dividend 30 Index Fund DVYA. Now about seven weeks old, the iShares Asia/Pacific Dividend 30 Index Fund is off to solid start in terms of garnering attention from investors as the fund has almost $10.3 million in assets under management. Not bad for seven weeks of work. DVYA's name is actually sort of deceiving as the fund is home to 31 stocks currently, but we're not going to quibble about that. What may be deceiving to some is Asia/Pacific is a rather large region and depending on one's sense of geography, the area could include 20 or more countries. The index DVYA strong dividend payers in Australia, Hong Kong, Japan, New Zealand and Singapore. That's it. Alone, Australia accounts for almost 45% of DVYA's weight while Hong Kong checks in at 21.25%. Singapore is next at 17.1% and New Zealand receives a weight of 10.2%. Given the many issues facing Japan's economy and that Japanese equities have been labeled as "undervalued" for several years with few investors biting, it might be a good thing the land of the rising sun only accounts for 6.8% of DVYA's weight. Financials represent 23.5% of the fund's sector weight, but conservative investors will like the fact that consumer staples and telecom names combine for over 36% of DVYA's sector allocation. Industrials are the only other group to receive double-digit representation. DVYA has a few potential rivals, including the SPDR S&P International Dividend ETF DWX and the WisdomTree Australia Dividend ETF AUSE, though it should be noted, DWX is more diverse than DVYA at the country level and AUSE obviously focuses on Australia. With an expense ratio of 0.49%, DVYA is more expensive than DWX (0.45%) and cheaper than AUSE (0.58%). Of course, with ETFs such as DVYA, DWX and related fare, the most important issue after performance is yield. In that case, DVYA does impress with a 30-day SEC yield of 4.82%, according to the iShares Web site. Given that DWX is home to more than quadruple the number of stocks and more than six times the number of countries as DVYA features, this may not be an apples-to-apples comparison, but the SPDR fund does feature a 30-day SEC yield of almost 8.7%.