New Dividend ETFs – IQDF, IQDE, IQDY
FlexShares launched three new ETFs this week. And there’s definitely a theme to the new ETFs – international dividends.
Let’s take a closer look…
FlexShares International Quality Dividend Index Fund (IQDF)
IQDF provides exposure to large cap non-US dividend paying stocks. And it has a reasonable expense ratio of 0.47%.
The top five countries in IQDF are the UK, Japan, Australia, France, and Canada. Stocks from these five countries make up more than 51% of the ETF.
More than 27% of IQDF’s holdings are financial stocks. And the next biggest sector allocation is energy stocks with 11%. As you can see, this fund invests heavily in financials.
FlexShares International Quality Dividend Defensive Index Fund (IQDE)
IQDE is designed to provide exposure to large cap non-US dividend paying stocks but with less volatility than IQDF.
In short, they target a beta lower than the Parent Index (Northern Trust International Large Cap IndexSM).
Again, the top five countries are the UK, Japan, Australia, France, and Canada… but with slightly different weightings. This time the top five countries make up more than 53% of the ETF.
Financials still represent the biggest sector allocation with more than 27% of IQDE’s holdings. The next biggest sector is energy stocks with 11%. So this one is heavily invested in financials too.
International Quality Dividend Dynamic Index Fund (IQDY)
IQDY is designed to provide exposure to large cap non-US dividend paying stocks but with more upside and bigger dividends than IQDF. The target beta for this fund is higher than the Parent Index (Northern Trust International Large Cap IndexSM).
Again, the top five countries are the UK, Japan, Australia, France, and Canada… but with slightly different weightings. This time the top five countries make up around 52% of the ETF.
Financials still represent the biggest sector allocation with more than 27% of IQDY’s holdings. The next biggest sector is energy stocks with 11%. So, this one is heavily invested in financials as well.
The bottom line is these funds look awfully similar to me. Unfortunately for FlexShares owner Northern Trust, the similarity of these funds will likely lead to confusion amongst investors. And that’s never good… My guess is these funds won’t catch on with investors and they’ll eventually get shut down.
Good Investing,
Corey Williams
Category: ETFs
