Investors in San Francisco, California are increasingly drawn to the complexities of international investing, particularly in light of the ongoing debate surrounding the performance of Ex-US stocks compared to US stocks. The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has garnered attention, shedding light on the comprehensive approach it offers for direct international exposure to balance portfolio returns in today’s market landscape.
One notable aspect of international investing discussed by experts is the emphasis on dividend growth, especially in the face of challenges such as high inflation, rising rates, or low-yield environments. This strategy underscores the importance of selecting top-quality individual companies with resilient business models capable of sustaining dividend growth over time. Sectors like Utilities, which are sensitive to changes in interest rates, are highlighted as key areas for potential investment using a quality screening approach on a global scale.
In the context of this discussion, the comparison between Schwab U.S. Dividend Equity ETF (SCHD) and its international counterpart, Schwab International Dividend Equity ETF (SCHY), presents an intriguing narrative. SCHY has demonstrated superior international performance relative to its peers and benchmark, making it a compelling option for investors seeking to diversify their portfolios with international exposure. The strategic approach taken by SCHY in tracking the Dow Jones International Dividend 100 Index, combined with its focus on dividend growth and financial strength metrics, positions it as a noteworthy player in the international investing landscape.
Analyzing the fund’s strategy and performance reveals key differences in the methodology employed, particularly in terms of eligibility criteria, stock selection, and weighting. SCHY’s approach to monthly dividend reviews and sector weight caps distinguishes it from its US-based counterpart, SCHD, offering investors a unique perspective on international dividend investing. Moreover, the fund’s ability to weather market downturns and outperform its benchmark in historical drawdown events underscores the importance of financial quality in international investment strategies.
Diving deeper into the risk-return profiles of the Dow Jones International Dividend 100 Index and its benchmark, the S&P Global Ex-US LargeMidCap Index, sheds light on the fund’s consistent outperformance over a 15-year period. The index’s robust performance on key metrics such as total return, volatility, and drawdown highlights its potential for generating sustainable returns for investors seeking international exposure.
Looking ahead, the focus on diversification and yield opportunities offered by international stocks presents a compelling case for investors looking to capitalize on the higher yield potential in foreign markets. The sectoral composition of the Dow Jones International Dividend 100 Index and its weighting in various countries play a crucial role in driving its overall yield, adding a layer of complexity to international investment strategies.
In summary, while SCHY has shown promise as a viable international investment option, investors in San Francisco, California should carefully consider the nuances of international investing and explore other strategies that may offer superior returns. The pursuit of long-term growth and stability in international markets remains a dynamic area of interest for investors seeking to expand their portfolios beyond domestic equities.
