INTERNATIONAL DIVIDEND GROWTH
A Prudent Path to Higher Yields
100
14
20
12
20
10
20
20
08
0
06
3.13%
3.07%
200
20
MSCI EAFE Dividend Masters Index
MSCI Europe Dividend Masters Index
300
04
International
400
20
2.18%
3.99%
500
02
S&P 500
Dow Jones US Select Dividend Index
600
20
Domestic
700
00
Dividend Yield
Dividend Growers
Dividend Payers
Dividend Non-Payers
Dividend Cutters
20
Index Name
800
98
(International Dividend Growth vs. U.S. High Dividend
Payer Indexes)
MSCI EAFE: Dividend Growers Outperformed
June 30, 1996-June 30, 2015
19
Boosted Income Potential Abroad
And perhaps more importantly, like their U.S. counterparts,
international stocks that have grown their dividends have
outperformed those that have not.
96
Looking Abroad for Increased Income and Reduced
Rate Exposure
If your focus is on dividend income, a prudent path
to higher yields may lie outside of the United States.
Stocks in Europe and in international developed markets
often have higher yields than those in the United States.
That means it’s possible to pursue the advantages of
a dividend growth strategy and relatively high dividend
yields, as reflected by the MSCI Dividend Masters
indexes shown below. Plus, international dividend
growth stocks come without the added U.S. interest rate
sensitivity of high dividend paying domestic stocks, such
as the Dow Jones US Select Dividend Index.
19
Dividend growth strategies focus on stocks that
consistently grow their dividends over time instead of
those that just pay high dividends. These strategies offer
a potentially all-weather dividend solution capable of
performing well regardless of the direction of interest
rates. (See Dividend Investing When Interest Rates Rise).
A Greater Diversity of Holdings is Key
Stocks in the utilities sector represent a key source of
interest rate risk in U.S.-based high dividend investing
strategies. For example, a high dividend yielding index
like the Dow Jones U.S. Select Dividend Index has
a whopping 32% of its weight in the utilities sector.
International dividend growth strategies, however, such
as those of the MSCI EAFE and MSCI Europe Dividend
Masters Indexes, have modest 7% and 9% respective
weightings to utilities. Because their yields are generally
less reliant on rate sensitive sectors, these strategies will
carry significantly less interest rate risk.
Growth of $100
Dividend Paying Stocks and Interest Rate Risk
Yield-hungry investors have increasingly gravitated to the
almost irresistible pull of high dividend paying stocks
for income. But chasing those high yields can come with
unintended exposure to interest rate risk that could hurt
performance. Is there a better place to look for that income?
Source: Bloomberg as of August 31, 2015. Indexes are unmanaged and one cannot invest
directly in an index. Past performance does not guarantee future results.
Source: Ned Davis Research analysis reflecting the performance of groups of companies underlying the MSCI EAFE from 6/30/1996–6/30/15. Growth of a hypothetical $100 in MSCI EAFE,
which represents developed markets outside of North America, including Europe, Australasia, and the Far East. MSCI EAFE components include: Dividend Growers: companies that increased
their dividend during the previous 12 months and a subset of Dividend Payers; Dividend Payers: companies that paid a quarterly or annual dividend in the calendar year and includes
Dividend Growers, Dividend Cutters, and Dividend Non-Changers; Dividend Non-Payers; and Dividend Cutters. Assumes dividends reinvested and all are equally weighted.
The takeaway
Whether you want a prudent path to higher yields, or
you’re looking for a solid European or international
developed equity allocation strategy, going global with
dividend growth is a compelling alternative for income
investors.
ProShares International Dividend Growers ETFs
EFAD ProShares MSCI EAFE
Dividend Growers ETF
EUDV ProShares MSCI Europe
Dividend Growers ETF
• Curated from popular indexes
•F
ocus on stocks with the longest track records
of consecutive dividend growth
Find out more
Visit ProShares.com or consult your financial advisor.
Investing involves risk, including the possible loss of principal. These ProShares ETFs are diversified and entail certain risks, including imperfect
benchmark correlation and market price variance, that may decrease performance. International investments may involve risks from: geographic
concentration, differences in valuation and valuation times, unfavorable fluctuations in currency, differences in generally accepted accounting principles,
and from economic or political instability. These funds may be adversely affected by economic uncertainty experienced by various members of the
European Union. Please see summary and full prospectuses for a more complete description of risks. There is no guarantee any ProShares ETF will
achieve its investment objective.
Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be
found in their summary and full prospectuses. Read them carefully before investing. Obtain them from your financial advisor or broker-dealer
representative or visit ProShares.com.
“MSCI,” “MSCI Inc.,” “MSCI Index” and “EAFE” are service marks of MSCI and have been licensed for use by ProShares. ProShares have not been passed on by MSCI or its affiliates as to their legality or suitability. ProShares based
on MSCI indexes are not sponsored, endorsed, sold or promoted by MSCI or its affiliates, and they make no representation regarding the advisability of investing in ProShares. THIS ENTITY AND ITS AFFILIATES MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO PROSHARES.
ProShares are distributed by SEI Investments Distribution Co., which is not affiliated with the funds’ advisor. © 2015-5242