Want High Dividend ETFs? Go Global

Singapore, Brazil among country ETFs yielding more than four times SPY.

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Reviewed by: etf.com Staff
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Edited by: Ron Day

Using etf.com’s Global Markets Drilldown, investors can quickly monitor performance trends in more than 40 countries via ETFs that represent those nations’ stock markets. 

That’s a great starting point, in part because many investors might be pleasantly surprised at just how easy it is to analyze and allocate portfolios by country. 

For yield-seeking financial advisors and investors, that convenient initial step can then take on greater significance when using the broader toolset on the site to identify non-U.S. stock markets that, at the index/ETF level, produce yields well above those of the SPDR S&P 500 Trust ETF (SPY).

The broad U.S. market, as measured by SPY, throws off just a yield of just 1.4%, which is near the lowest rate for that popular indicator since 2001. Yet when venturing overseas, investors can find several single-country ETFs that yield more than four times that amount. In fact, they are found in many different parts of the world, both in diversified form and in ETFs focused on a single country’s stock market.

High Dividend ETFs in Three Countries

Here are three country ETFs that show what is possible, at least when it comes to the “headline” dividend yield. Naturally, investing internationally has its own set of risks, and investors should not simply window shop and buy based on one data point such as dividend yield.

iShares MSCI Singapore ETF 

The iShares MSCI Singapore ETF (EWS) is one of dozens in a series issued starting way back in the 1990s by the firm that now tops the ETF asset-gatherers list. This fund’s 6.8% towers over that of the broad U.S. market and is even roughly double that of many “dividend-focused” U.S.-based equity ETFs. 

With a weighted average market capitalization of more than $28 billion, EWS is not an off-the-beaten path collector of obscure stocks that happen to post very high yields. And at 10.8 times trailing 12-month earnings, it sells at a less than half SPY’s 22.7 multiple. 

This $408 million in assets ETF holds just 23 stocks. But as is often the case in smaller nations like Singapore, those 23 stocks make up more than 80% of the total market capitalization of the country’s stock market.

Franklin FTSE Brazil ETF

Switching hemispheres, the Franklin FTSE Brazil ETF (FLBR) has a higher average market cap than EWS ($37 billion), spreads its risk across 85 stocks, and sells for just 7.5 times trailing earnings. Its yield, at 9.3%, is a dramatic premium to even many emerging markets, and thus investors must do their homework to make sure the inherent risk in Latin American stock market investing is within their bandwidth.

iShares MSCI Austria ETF

And, turning back to another of the iShares country ETF set, but another continent, the overlooked $55 million iShares MSCI Austria ETF (EWO) has been listed for nearly 28 years. So, if you are scoring at home, it now holds less than $2 million per year of its tenure.

While we don’t typically track those types of statistics, I suspect that’s toward the lower end. EWO yields 5.8% and its 23-stock portfolio carries a P/E ratio of only seven times and sells for less than book value. Again, not surprisingly, in a country lacking the industry diversity of the US and other more developed nations, nearly half of EWO’s portfolio is invested in the financial sector, while technology stocks are virtually absent.

Single Country ETFs for High Dividend Yields

It is a whole different world out there. But thanks to the wide variety of single country ETFs, investors can span the globe and pinpoint where they want to try to add yield, growth potential or both. 

Rob Isbitts was an investment advisor for 27 years before selling his practice to focus on ETF research and education. He is based in Weston, Florida. Contact him at  [email protected] and follow him on LinkedIn.