Why revisit it today?

Let’s introduce the ETF first. The idea is simple. Invest in a passive tracker of the 100 international ideas that yield the highest dividend. The highest dividends are found in Financials firms, Energy and Mining with Real Estate and Industrials comprising nearly 90% of the index.

Conclusion

I’ve sampled through a number of the holdings, and also focused on the UK names, and as you can see some good names in there where Serica has its temporary Triton disruption, where Energean had its Italy assets deal with Carlyle fall through, M&G is perhaps the weakest given its outflows which hopefully cease before it (and the UK) bleed out with outflows. These six give a decent flavour of what you are buying into.

I’m struck by the fact that there are ideas which I’d otherwise not be able to easily access. Companies like shipping co Zim, or Norwegian Oily DNO.

I’m struck by a -0.84% capital loss in a pretty volatile quarter is not bad either.

I get to a 12.64% average yield and a 8.7X p/e as the average of the 100 holdings.

A ~1% yield per month is quite appealing as a place to hide, and where the index rebalances jettisoning those too weak to sufficiently pay dividends replacing them with the highest dividend out of the top #200 not in the index.

Is it wise to buy into this as the world faces potential recession? Some ideas are cyclical but not all. Besides I’m not wholly convinced yet that the forecast doom and gloom will happen. I see countries accelerating trade deals on the back of Lib Day (not with the US), although maybe the UK and Japan may get a US free trade deal. US tax cuts and strong momentum could surprise us with the US. I see myself watching this until August, and then re-evaluating (prior to the August rebalance)

I pounced on this given its 15% fall from the Lib Day sell off I’ve got a fair bit of margin of safety and where the capital returns are broadly zero and where I get over 12% yield to park some money.

For non-UK folks there’s a US SDIV, a Euro UDIV (that ticker would be considered very rude in the UK!) listed in Germany, Italy and Switzerland.

There is a 0.45% management charge plus trading costs (quarterly) which I expect aren’t awfully high, but I couldn’t find what they were (the TER).

Regards

The Oak Bloke

Disclaimers:

This is not advice – make your own investment decisions.