IDOG: A Great International Fund With Yield (NYSEARCA:IDOG)

At this point in the investment cycle, my preference leans significantly towards international equities over US equities, primarily due to their prolonged underperformance. Exploring international market ETFs opens up several avenues. A particularly intriguing option is investing in the ALPS International Sector Dividend Dogs ETF (NYSEARCA:IDOG). This ETF follows the S-Network International Sector Dividend Dogs Index, aiming to mirror the index’s returns, minus any fees and expenses. Leveraging the ‘Dogs of the Dow Theory’, the strategy is applied across various sectors, starting with the S-Network Developed International Equity 1000 Index to select eligible securities. IDOG targets high dividend yields in the market by choosing the top five yielding securities from each of the 10 sectors and then equally distributing the weight among them.

The investment strategy of the fund is concentrated on companies located in developed markets outside the Americas, presenting a portfolio rich in high-dividend-yielding stocks. With its goal to offer investors access to the undervalued world of international dividend stocks, IDOG stands as a compelling option in times of economic uncertainty, promising diversification and potentially high yield.

Unveiling IDOG’s Holdings: A Deep Dive

IDOG’s portfolio is well-diversified, with holdings spanning various sectors and geographic regions. This diversification allows the fund to mitigate risk while taking advantage of a wide range of market opportunities.

The fund’s top holdings span the globe. I like the mix here.

These holdings indicate a broad industry coverage, diversifying the fund’s exposure and reducing sector-specific risk.

Geographically it’s also a nice mix. I love seeing portfolios like this because of the differentiation and evenness of the allocations.

Dissecting IDOG’s Sector Composition and Weightings

One of the key features of IDOG’s investment strategy is its sector diversity. The fund aims to maintain equal weightage across 10 sectors, excluding real estate. This approach ensures that the fund’s performance is not disproportionately affected by the performance of a single sector.

This is compelling to me, as it should result in a very different return pattern that most other equity ETFs you see out there.

IDOG in Comparison: A Peer Analysis

To evaluate the effectiveness of IDOG’s strategy, it’s helpful to compare it with similar ETFs. For this analysis, we’ll consider the SPDR S&P Global Dividend ETF (WDIV). When we compare the two funds to each other, we see that IDOG has from a total return perspective outperformed WDIV solidly, with less volatility and more consistency over time.

While other funds also focus on dividend-paying stocks, IDOG’s sector-by-sector approach and equal weighting offer a more balanced exposure. This strategy can potentially provide better risk-adjusted returns, especially during periods of market volatility. This largely explains why it’s done so well.

Speaking of yield, it’s been pretty consistent over time, and has a 4.41% rate now. Nothing wrong with that.

IDOG’s Investment Prospects: Pros and Cons

Like any investment, IDOG comes with its own set of advantages and challenges. On the positive side, IDOG’s high dividend yield makes it an appealing choice for income-focused investors. The fund’s diversified portfolio, spread across multiple sectors and countries, also provides a degree of risk mitigation.

However, IDOG is not without its challenges. Investing in international markets comes with its own set of risks including political instability, currency fluctuations, and differing regulatory environments. Furthermore, IDOG’s focus on high-dividend stocks might make it more susceptible to market downturns, as companies with high dividend yields often have lower growth prospects.

The Verdict: Should You Invest in IDOG?

IDOG is solid. Its diversified portfolio and equal weighting strategy can provide a level of risk mitigation, while its focus on high-yield stocks offers potential for income generation. I actually think this is a great fund and worth considering for those wanting to diversify beyond the US, with some yield to boot.