Now, youÂ know that I prefer to buy shares of high quality common stocks that have a track record of increasing their dividends year over year.Â
However, when we are faced with the problem of a lack of diversification due to a lowÂ amount of investment capital, or whatever the case may be, ETF’s offer an alternative to individual common stocks.
Although it takes a lot of work,Â it is not typically that difficult to select a high quality dividend growth stock in domestic markets.Â However, international diversification is prudent for the long term investor and carefully selecting international stocks for the dividend growth investor can be tedious.
Alligator investor breaks down the Powershares International Dividend Achievers ETF (PID), which fits very nicely in a portfolio with our domestic dividend growth stocks.
Here are the details of PID:
The PIDÂ ETF is designed to track the performance of dividend paying American Depositary Receipts and foreign common stocks trading on major US exchanges. To become eligible for inclusion in the International Dividend Achievers Index a stock must be incorporated outside the United States , trade on the NYSE, NASDAQ or AMEX, and have increased its annual regular dividend payments for the lastÂ five or more consecutive years. In addition, Mergent requires that a stock”s average daily cash volume exceed $500,000 dollars in the two month period prior to reconstitution.
The fund is heavily weighted in the financial sector and large-cap value stocks make up the bulk of the holdings.Â This is quite similar to domestic dividend mutual funds and ETFs.
The Powershares Dividend Achievers ETF looks to be a sound way to add international exposure to a dividend growth portfolio.