A smart beta exchange traded fund, the ALPS International Sector Dividend Dogs ETF (IDOG) debuted on 06/28/2013, and offers broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Managed by Alps, IDOG has amassed assets over $222.01 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for IDOG are 0.50%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.26%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, 288 Hk Wh Group Ltd. Accounts for about 2.25% of total assets, followed by Bt/a Ln Bt Group Plc and Upm Fh Upm-Kymmene Oyj.
Its top 10 holdings account for approximately 21.52% of IDOG's total assets under management.
Performance and Risk
So far this year, IDOG return is roughly 17.11%, and was up about 10.03% in the last one year (as of 11/15/2019). During this past 52-week period, the fund has traded between $23.10 and $27.18.
IDOG has a beta of 0.80 and standard deviation of 11.81% for the trailing three-year period, which makes the fund a medium risk choice in the 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 $24.83 B in assets, Vanguard FTSE Developed Markets ETF has $75.47 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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
To read this article on Zacks.com click here.
Zacks Investment Research