Investors looking to bolster their dividend portfolios can find compelling opportunities in developed markets outside the U.S. Many dividend payers in these markets sport higher dividend yields than the equivalent U.S. equities and exchange-traded funds (ETFs) make accessing a broad basket of foreign dividend stocks easy and cost effective.

Employing smart beta strategies in combination with the search for international income can benefit investors as well. The FlexShares International Quality Dividend Index Fund (IQDF) is a prime example of an income-generating, international, smart-beta ETF. IQDF follows the Northern Trust International Large Cap Index.

While dividend ETFs have long been one of the major contributors of smart beta assets and the subsequent growth in this part of the ETF space, some issuers have gone beyond standard weighting strategies, such as weighting by yield or length of dividend increase streaks. Although IQDF is four and a half years old, it fits the bill as new generation, fundamentally weighted dividend ETF.

IQDF employs a unique smart-beta approach by focusing on fundamental factors that are key to securing dependable sources of dividend growth. Those factors include profitability, solid management and reliable cash flow.

IQDF has a trailing 12-month dividend yield of 3.55%, making it a credible alternative to the popular MSCI EAFE Index, which yields 2.42%. The ETF also offers investors a play on rebounding earnings trends in developed markets outside the U.S.

“We believe that earnings across Europe, Australasia and Far East (EAFE) are still well below their prior cycle high which is generally tied to the delayed economic cycle across Europe, where earnings are still roughly 40% below their prior peak,” according to the FlexShares website. “In many advanced economies, the aftereffects of the financial crisis are finally fading. Long-troubled Eurozone economies, even Greece, show signs of finally turning a corner.”

More than 57% of IQDF's 198 holdings are considered value stocks with another 13% classified as growth names. The weighted average market capitalization of those components is $48.3 billion, confirming IQDF's status as a large-cap fund ideal for conservative dividend investors.

Importantly, IQDF's smart-beta strategy strives to ensure investors are adequately levered to positive dividend action over the long term.

“We believe, however, even in the face of this earnings growth that investors in international dividend stocks must be confident that the dividend being paid is sustainable over the long term, meaning that the payout is well covered and the payer company has the potential to grow it over time,” according to FlexShares. “Measuring a company’s core financial health makes it possible to evaluate the likelihood of future dividends increasing or decreasing. With this approach, the reliance on publicly available financial data means new dividend payers can be evaluated similarly to stocks that have paid dividends for decades.”

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