Performance Comparison: Dividend ETFs For U.S., Europe, Emerging Markets, And The World

Includes: DEM, DVY, FDD, FGD, SPY
by: Richard Shaw

Emerging markets dividend stocks (NYSEARCA:DEM) outperformed US dividend stocks (NYSEARCA:DVY) since the beginning of 2008 by about 20%.

It outperformed European dividend stocks (NYSEARCA:FDD) since 2008 by about 52%, and exceeded the performance of a global selection of dividend stocks (NYSEARCA:FGD).

However, over one year the ranking flipped with DVY outperforming DEM by about 16%, while FGD continued to eat the dust behind DEM and DVY.

In the last three months, DEM once again assumed the lead, outperforming the U.S., Europe and a global selection of dividend stocks by roughly 4% to 6%.

Performance Relative to the S&P 500:

Emerging market dividend stocks outperformed the S&P 500 (NYSEARCA:SPY) since 2008 by about 17%. U.S. dividends stocks underperformed the S&P 500 by about 3%. European dividend stocks underperformed the S&P 500 by about 55%.

In the past year, the U.S. was the better region for dividend stocks, and it outperformed the S&P 500 by about 3%. The other categories underperformed, with Europe most behind by about 20%.

For the past three months, the emerging market dividend stocks essentially matched the S&P 500, while the others underperformed the S&P 500 by about 5% to 6%.

Portfolio Attributes:

This table using Morningstar data, compares the expense ratios, trailing yields, prospective yields, price-to-cash flow, 5-year future earnings growth and 5-year historical earnings growth of the ETFs for the S&P 500; as well as for dividend stock selections for the U.S., Europe, emerging markets and the world.

click images to enlarge

The 3.19 cash flow multiple for global dividend stocks seems strangely low compared to the other funds, but that is the reported number at Morningstar.

DEM has a competitive yield, cash flow valuation and earnings growth pattern.

Sector Weights of Each Regional Dividend ETF

DEM is the most weighted to cyclical stocks, and DVY the least. DVY is most heavily weighted to defensive stocks, and DEM the least.

This image shows the weighting to sectors for each fund, and the weight relative to the weights of those sectors in the S&P 500.

Top Holdings of Each ETF (with Wright's ratings)

This table presents the top ten holdings of each of the four regional ETFs, along with the rating assigned by Wright Investor's Services, based on data from WorldScope (a Thompson Reuters database).

This image contains an explanation of the Wright's rating system. The rating has four parts: Liquidity, Financial Strength, Profitability/Stability, and Growth.

It looks like DVY, the U.S. dividend ETF, has a higher growth portfolio, if the top 10 holdings can be considered indicative.

Performance Charts:

These charts from take dividends into consideration.

From January 1, 2008

One Year

3 Months

Disclosure: QVM has positions in SPY in some managed accounts as of the creation date of this article (April 3, 2012).

Disclaimer: This article provides opinions and information, but does not contain recommendations or personal investment advice to any specific person for any particular purpose. Do your own research or obtain suitable personal advice. You are responsible for your own investment decisions. This article is presented subject to our full disclaimer found on the QVM site available here.