First Trust launches S&P international dividend ETF
ETF provider and asset manager First Trust has launched the First Trust S&P International Dividend Aristocrats ETF on the Nasdaq Stock Market LLC under the ticker symbol FID.
The firm writes that the fund seeks investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of the S&P International Dividend Aristocrats Index. The index is designed to measure the performance of high dividend-yielding, non-US companies that have followed a managed-dividends policy of increasing or maintaining dividends for at least 10 consecutive years.
Investing internationally in high quality, dividend-paying companies may provide gains when domestic markets are flat or declining, as global markets often follow different cycles than the US markets. Every security selected for the index must meet stringent eligibility criteria based on historical dividend increases, dividend yield and pay-out ratio. “In our opinion, dividends are often a sign of strong corporate health, and dividend increases may signal growing confidence from management. While many dividend ETFs focus on domestic stocks, we believe strong dividend policies are also important for international stocks. This ETF seeks to provide exposure to international stocks that may be well-positioned for dividend growth,” says Ryan Issakainen, CFA, Senior Vice President, ETF Strategist at First Trust. A company’s ability to reliably increase its dividend may be attractive to investors looking for companies that have the potential to endure difficult market and economic environments.
“Since its 2005 inception, the S&P Dividend Aristocrats index family has been one of the leading families of indices in the areas of dividend growth and providing exposure to dividend payers in many markets,” says Joe Kairen, Senior Director, S&P Dow Jones Indices. “We are delighted to extend the S&P Dividend Aristocrats index-based concept to the international, global ex. U.S. markets to measure the companies abroad that have consistently increased or maintained their dividends over a period of 10 years.”
Prior to August 30, 2018, the fund’s investment objective was to seek to track the NASDAQ International Multi-Asset Diversified Income Index. The fund, formerly known as International Multi-Asset Diversified Income Index Fund, previously traded under the ticker symbol YDIV.