New York, NY – Investors looking for international dividend ETF options may find themselves comparing various funds to make informed decisions. The iShares International Select Dividend ETF (IDV) is one contender for consideration, offering a mix of high dividend yield and sustainable payout ratios. However, there are drawbacks to consider, such as a lack of diversification with a focus on European holdings and an uncertain outlook. Alternatively, the Vanguard International High Dividend Yield ETF (VYMI) presents itself as a strong competitor, boasting superior performance metrics, lower expenses, and broader geographic diversification.

IDV, an exchange-traded fund tracking the Dow Jones EPAC Select Dividend Index, emphasizes high-quality international companies with significant dividend yields. With 136 holdings and $4.1 billion in assets under management, IDV’s portfolio is heavily weighted towards the United Kingdom, Italy, and Spain, with a strong focus on financial and utility sectors. In comparison, VYMI stands out for its extensive diversification with over 1,000 holdings and a different geographic distribution, including significant weight in Japanese holdings.

When assessing performance, expense ratios, and dividend yields, investors must consider the long-term outlook for international stocks. While all funds discussed have underperformed the US market over the past decade, international stocks historically outperformed during certain market conditions. IDV, with a relatively high expense ratio of 0.51% and a substantial dividend yield of 6.61%, may seem appealing, but its dividend growth has been moderate at best. On the other hand, VYMI’s lower expense ratio, higher average annual return, and geographic diversification make it a compelling option for investors.

Looking at the top holdings of IDV and its peers, the level of diversification within each fund becomes evident. While IDV may have 136 holdings, it lacks the diversification seen in VYMI, which has over 1,500 holdings. Furthermore, considering factors like overall performance, geographic diversification, and dividend sustainability is crucial when evaluating international dividend funds.

In terms of valuation, IDV’s recent performance has been flat, raising concerns about its attractiveness compared to its peers. While it may have a lower price-to-earnings ratio and price-to-book ratio, other factors like performance and diversification should also be taken into account. Ultimately, a diversified mix of international stocks can help reduce overall portfolio volatility and present opportunities for investors seeking to balance risk and return in their investment portfolios.

In conclusion, international dividend ETFs offer a unique opportunity for investors to access global markets and diversify their portfolios. While IDV may boast a high dividend yield, other factors like performance, diversification, and sustainability should not be overlooked. VYMI’s strong performance, broader diversification, and lower expenses make it a compelling choice for those seeking a well-rounded international dividend fund.