IDV ETF

IDV's portfolio of high-yielding dividend stocks in developed markets is well-positioned to benefit from a lower rate environment and a weakening U.S. dollar. Central banks like the Bank of England and ECB are turning dovish, which should act as a catalyst for IDV's fund price to move higher. The expected weakening of the U.S. dollar due to Federal Reserve rate cuts will likely benefit IDV, given its inverse correlation with the dollar's strength.

There are some excellent opportunities for investors in international stocks. The iShares International Select Dividend ETF offers a portfolio of top-notch dividend stocks in developing countries.

International Exchange-Traded Funds can reduce portfolio volatility without significantly impacting returns if they are well diversified. Although IDV has a high dividend yield, it is heavily focused on European holdings and may not provide strong returns in the future. VYMI, on the other hand, offers better performance, lower expenses, and more diverse geographic exposure, making it a preferable option.

IDV offers exposure to developed international high yield companies at a good price. It is less concerned with dividend growth, but has consistently delivered a high dividend yield. Valuation? Check. Yield? Check. Price catalyst to make it a buy? Not just yet, so it's a hold.

Value is currently out of favor, both in the U.S. and internationally. Specific to the Vanguard High Dividend Yield ETF and the iShares International Select Dividend ETF, both are trading at discounted valuations. Especially in the case of IDV, it's currently trading at single-digit P/E and yielding almost 7%, attractive both compared to the overall market and its own historical averages.

The iShares International Select Dividend ETF offers coverage to 100 high dividend-yielding developed market securities outside the US. We pick out some of the flaws in IDV's screening process. The ETF has a high yield but poor dividend growth and has delivered lower returns compared to a popular plain vanilla developed markets ETF.

iShares International Select Dividend ETF is invested in 100 dividend stocks from developed countries. It is overweight in financials but well-diversified across countries and holdings. IDV has an attractive 7% yield and a dividend growth rate beating inflation, but total return is underwhelming relative to peers.