International ETFs for yield
In this morning's note you said VHY was your favourite ETF for Dividends Locally, Can you please expand on what your favourite ETFs are for international exposure and dividends?
Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
In this morning's note you said VHY was your favourite ETF for Dividends Locally, Can you please expand on what your favourite ETFs are for international exposure and dividends?
Hi Chris,
We often say we like US stocks for growth and ASX names for yield hence your question is a touch more challenging than it initially sounds, i.e. The ASX 200 yields more than three times the S&P 500, reflecting the Australian market’s higher dividend payout culture and its heavier weighting toward financials and materials — sectors that tend to distribute more earnings as dividends. Two US ETFs we like are the SCHD and VYM:
Schwab US Dividend Equity ETF (NYSEARCA: SCHD) — currently holds around 102 quality US companies screened for financial strength, dividend sustainability and consistent payouts. With a yield of ~3.2%, a low 0.06% expense ratio and a strong history of dividend growth, SCHD offers an attractive balance of income, quality and long-term capital growth.
Vanguard High Dividend Yield ETF (NYSEARCA: VYM) — takes a broader approach, holding more than 600 US stocks and offering a yield of ~2.4%, for a low 0.04% fee. VYM provides greater diversification, while SCHD is more concentrated and quality-focused.
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