The ALPS International Sector Dividend Dogs ETF (IDOG) made its debut on 06/28/2013, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Alps, IDOG has amassed assets over $222.92 M, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the S-Network International Sector Dividend Dogs Index.
S-Network International Sector Dividend Dogs Index identifies five high yielding securities, based on regular cash dividends, in each of the ten Global Industry Classification Standard sectors and is rebalanced quarterly.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.50% for IDOG, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.25%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Jp Takeda Pharmaceutical Co. Ltd. Accounts for about 2.27% of total assets, followed by Ln Bt Group Plc (BT/A) and Fh Upm-Kymmene Oyj (UPM).
IDOG's top 10 holdings account for about 21.77% of its total assets under management.
Performance and Risk
Year-to-date, the ALPS International Sector Dividend Dogs ETF has added about 17.57% so far, and it's up approximately 13.35% over the last 12 months (as of 12/09/2019). IDOG has traded between $23.10 and $27.18 in this past 52-week period.
The fund has a beta of 0.80 and standard deviation of 11.79% for the trailing three-year period, which makes IDOG a medium risk choice in this particular space. With about 51 holdings, it effectively diversifies company-specific risk.
ALPS International Sector Dividend Dogs ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard FTSE All-World ex-US ETF (VEU) tracks FTSE All-World ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard FTSE All-World ex-US ETF has $25.14 B in assets, Vanguard FTSE Developed Markets ETF has $76.30 B. VEU has an expense ratio of 0.09% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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ALPS International Sector Dividend Dogs ETF (IDOG): ETF Research Reports
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
Vanguard FTSE All-World ex-US ETF (VEU): ETF Research Reports
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