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The ex-U.S. Dividend ETFs are the Big Winners for 2012

Dividend ETFs have enjoyed a spate of popularity these last few years as investors seek the cushion of yield and some diversity in their portfolios. There are now about 50 dividend ETFs available in many, many variations, based on equity indexes that may include geographic region, country specific, market cap weighted, fundamentally weighted, yield weighted, and other various yield and/or income methodologies. Last year, as much of the world fretted over regional fiscal woes, Europe, the emerging markets, and other non-U.S. stock funds came clawing back to life in a big way. Let's examine the top 2012 dividend ETFs as they reveal some regional market gains - helped along of course with dividends. Note that WisdomTree has seven of the top 10 funds. WisdomTree has been a leader in the dividend ETF niche, especially with the non-U.S equity varieties. Many of these funds are rather unique offerings, having little or no competition such as (AUSE), (GULF), (DOO), and others.

Ticker

Fund Name

2012 Total Return %

(DFE)

WisdomTree Europe SmallCap Dividend Fund

31%

(DLS)

WisdomTree International SmallCap Dividend Fund

24%

(DGS)

WisdomTree Emerging Markets SmallCap Dividend Fund

24%

(DIM)

WisdomTree International MidCap Dividend Fund

21%

WisdomTree Australia Dividend Fund

20%

(IDV)

iShares Dow Jones EPAC Select Dividend Index ETF

19%

(DES)

WisdomTree SmallCap Dividend Fund

18%

(DWM)

WisdomTree DEFA Fund

18%

(HILO)

EGShares Low Volatility Emerging Markets Dividend ETF

17%

(DOL)

WisdomTree International LargeCap Dividend Fund

17%

Closer to home: U.S. centric equity Dividend ETFs

Some top performing funds with holdings of primarily U.S. stocks also made a respectable showing as well. (CVY), the Guggenheim Multi-Asset Income was the top U.S. equity dividend ETF with a return of 13.2%. To be fair, this ETF has holdings which include ADR's which surely goosed up its performance by having exposure to those non U.S.-based holdings that trade on the domestic U.S. exchanges. (DTD), the WisdomTree Total Dividend fund, gained a solid 13.1%. (VYM), Vanguard's High Dividend Yield Index ETF gained a respectable 12.7%. And finally, the WisdomTree Large-Cap Dividend (DLN) secured a solid 2012 total return of around 12.7%.

Popular dividend ETFs with large market-caps such as the iShares Dow Jones Select Dividend Index (DVY) sported a 10.5% return; Vanguard's Dividend Appreciation ETF (VIG) a healthy 11.6% and (SDY), the SPDR S&P Dividend ETF -finished with a solid 11.6% gain for 2012.

Summary:

With those healthy 2012 gains made mainly by international, emerging market and other non-U.S. index based funds; it's doubtful large gains will continue for 2013. It's unusual to have back to back outsized gains for most funds, especially of a niche variety. Perhaps the U.S. broad-based equity counterparts can again have some respectable and even larger returns for 2013.

Source: 2012's Top Performing Dividend ETFs