Rating Some Of The International Dividend ETFs

Back in September, we graded the oil services ETFs. So popular was that piece that we received scores of emails asking for rankings of various ETF groups. We're happy to oblige and do so with a look at an area of the market that nearly every investor is talking about these days: Dividends. And not just any old dividends. We're zeroing in on international dividend ETFs, trying to help you find the best bang for your buck. Our four criteria, which were applied on an equal-weight basis, were liquidity, fees, diversity of holdings and potential to perhaps break away and outperform the rest of the quartet in a bull market. Yield was not part of the evaluation process, but we will mention each ETF's yield for you. Let's get started with the... iShares Dow Jones International Select Dividend Index Fund IDV: The iShares Dow Jones International Select Dividend Index Fund is certainly the biggest ETF on our list by assets, but assets under management isn't part of the criteria here. IDV's liquidity is good, but its fees are in the middle of this pack with an expense ratio of 0.50%. It'd be nice if IDV's 22% weight to financials was lower, but four other sectors get double-digit weights. Over 10 countries are represented in IDV and that's a plus, though over 20% devoted to Italy, France, Spain and Austria could restrain IDV's breakout potential. Yield from Finviz: 5.17%. Grade: B First Trust STOXX Euro Select Dividend ETF FDD: Right away, we see the problem with this ETF and that's Europe. A 0.6% expense ratio isn't great, nor is FDD's liquidity. Three sectors – financials, telecom and utilities – account for over 80% of FDD's weight and financials check in at over 40% on their own. That's just too much and it contains FDD's upside. Yield from issuer Web site: 5.46%. Grade: C SPDR S&P International Dividend ETF DWX: DWX isn't as big as IDV, but it's cheaper at 0.45%. In fact, that expense ratio is good enough to make DWX the cheapest member of our list. Five sectors get double-digit allocations and nearly 30 countries, including some emerging markets, are represented here. In the right environment, DWX could take on another 30% from where it currently trades. A break of resistance at $52 could take the ETF to the 60s. Yield from issuer Web site: 6.95%. Grade: A. WisdomTree International LargeCap Dividend ETF DOL: With an expense ratio of 0.48%, the WisdomTree International LargeCap ETF is the second-cheapest member of our list. It's sector diversity is just a tick below DWX's and IDV's, though DOL does offer exposure to 18 countries, including back door emerging markets exposure via Hong Kong and Singapore. A patient investor that can get into DOL around $40, might be able to see $50 in 12-14 months. Yield from issuer's Web site: 3.24%. Grade: A- Global X SuperDividend ETF SDIV: The newest member of our list, the Global X SuperDividend ETF made its debut earlier this year and is proving to be one of the more worthwhile new ETFs of 2011. Not a pure international play as the U.S. accounts for over a third of SDIV's weight, 10 other developed and emerging markets are represented in this ETF. What SDIV lacks in liquidity and low fees (0.58% expense ratio), the ETF makes up for in sector diversity and the fact that it holds 100 stocks each accounting for 1% of the ETF's weight. Yield from issuer's Web site: 3.3%. Grade: B+