IDVY targets international companies with consistent dividend growth records, focusing on firms that have increased payouts for at least five consecutive years. This screens out dividend cutters and cyclical payers that plague many international income strategies.
How It Works
The fund tracks the NASDAQ International Multi-Asset Diversified Income Index, selecting non-US companies with 5+ years of consecutive dividend increases. Holdings are weighted by a composite score combining dividend growth consistency, payout sustainability, and yield. The methodology favors steady growers over high yielders, rebalancing quarterly to capture emerging dividend achievers while pruning those losing momentum.
Key Features
- Screens for 5+ years of dividend growth vs simple yield chasing
- Captures international dividend growth earlier than 10-year achiever funds
- Quarterly rebalancing catches momentum shifts in payout policies
Risks
- Currency swings can erase 10-15% of returns in strong dollar years
- European/Asian dividend cuts hit harder during regional banking stress
- Growth screen excludes many high-yielding telecoms and utilities
Who Should Own This
Best for investors seeking international equity income without the dividend trap risks common in high-yield strategies. Works as a 10-20% sleeve alongside US dividend growers for geographic diversification. Those needing current income should look elsewhere — this prioritizes growing dividends over current yield.