Dividend payments have traditionally been the direct competitor of interest rates. In times of rate cuts, dividends become more attractive to investors. It therefore seems appropriate to include in our investment portfolio an asset that provides us with the potential of those companies that distribute juicy dividends. We also do it in a global, diversified way and with moderate costs. That is, through a passively managed ETF, indexed to an index that groups together companies with high profitability on dividend-Yield at a global level. It is about the VanEck Morningstar Developed Markets Dividend Leaders UCITS ETF (ISIN: NL0011683594), a listed fund with benchmark Morningstar® Developed Markets Large Cap Dividend Leaders Index™ (gross total return index).
This ETF, launched on May 23, 2016, is domiciled in the Netherlands, marketed by the manager VanEck Asset Management, with the reference currency € and its current assets are 1,155.1 million euros. The fund’s dividend policy is distribution.
The benchmark measures the returns of high dividend stocks in developed countries around the world. It is currently made up of 18 markets, specifically: Germany, Australia, Canada, Denmark, Spain, the United States, Finland, France, Hong Kong, Italy, Japan, Norway, Austria, Portugal, the United Kingdom, Singapore, Sweden and Switzerland. The ETF is passively managed, it invests in the underlying (physical) securities that make up the index and does so with complete physical replication, with semi-annual rebalancing. The Morningstar® Developed Markets Large Cap Dividend Leaders Index™ is comprised of 100 stocks from an international universe that meet the criteria for dividend policy, size and liquidity. The index uses a weighting method based on the total available dividend.
The Top 10 in the composition of the fund:
By geography, diversified, with 98.8% positioned in companies from developed countries, 32.4% in the Euro Zone, 29.6% in the US, 11.1% in the UK, 10% Europe (ex-Euro Zone), 9, 3% in Canada, 3.9% in developed Asia, 1.2% in Japan, among other regions.
By sectors, 42.3% positioned in companies in the Financial sector, 15.8% Health, 9.7% Energy, 5.7% Communication, 5.5% Public Services, 5.1% Industrial sector, 4.9% Consumer Cyclical, 4.1% in technology companies, 4% in Basic Materials, 2% Defensive Consumption and 0.2% in Real Estate.
The risk rating is 6on a scale with minimum risk 1 and maximum 7. Complies with UCITS and Mifid II regulations. Other data of interest, total expenses (TER) of 0.38%.
The profitability so far in 2024 is around 10% and Annualized since its launch, the profitability is 10.54%.
Profitability/risk indicators:
|
Indicators |
1 year |
3 years |
5 years |
|
Volatility |
8.30 |
12.3 |
15.6 |
|
Maximum drop |
-2.08 |
-9.96 |
-25.61 |
|
Beta |
0.34 |
0.51 |
0.78 |
|
R squared |
0.14 |
0.33 |
0.58 |
|
Correlation |
0.37 |
0.58 |
0.76 |
|
Tracking Error |
2.74 |
3.51 |
3.10 |
|
Sharpe ratio |
0.58 |
0.32 |
0.18 |
|
Ratio de Sortino |
1.03 |
0.34 |
0.16 |
|
R of Traynor |
3.98 |
2.26 |
1.06 |
|
R Information |
-0.25 |
0.12 |
-0.05 |
|
Alpha |
0.66 |
0.78 |
0.06 |
As shown by the profitability indicators vs. risk, it is a conservative ETF, with moderate beta so movements in its capitalization are lower than market movements. Good risk-adjusted profitability and compared to risk-free profitability, with interesting Sortino, Sharpe and Traynor ratios. The ETF fits the benchmark fairly well, with moderate Tracking Error.