ProShares MSCI EAFE Dividend Growers ETF (EFAD) seeks to track the MSCI EAFE Dividend Masters Index, which measures the performance of developed market companies in Europe, Australasia, and the Far East that have consistently increased their dividend payments for at least 10 consecutive years.
How It Works
EFAD uses a passively managed, market-capitalization-weighted approach that screens for dividend aristocrats across 21 developed international markets excluding the U.S. and Canada. The fund holds companies that demonstrate sustained dividend growth over a decade, with positions weighted by market value. Index reconstitution occurs annually in May, with quarterly reviews to ensure continued dividend growth qualification. Holdings typically range from 50-100 companies across various sectors.
Key Features
- Focuses exclusively on international dividend aristocrats with 10+ years of consecutive dividend increases, providing quality income exposure
- Covers developed markets across Europe, Asia-Pacific, and Far East, offering geographic diversification beyond U.S. dividend stocks
- Currently yields 2.33% with potential for dividend growth, appealing to income-focused investors seeking international exposure
Risks
- This ETF can lose value if international dividend aristocrats cut dividends during economic downturns, potentially removing companies from the index
- Currency fluctuations between the U.S. dollar and foreign currencies can reduce returns even when underlying stocks perform well
- International equity markets can decline 20-40% during global recessions, with dividend-focused stocks sometimes underperforming growth stocks in bull markets
Who Should Own This
Best suited as a satellite holding (5-15% of equity allocation) for income-focused investors with 3+ year time horizons seeking international dividend exposure. Medium risk tolerance required due to foreign exchange and equity volatility. Ideal for investors already holding U.S. dividend ETFs who want geographic diversification in their income strategy.