SCHY: International Dividend Exposure Worth Considering
International investing has been a topic of debate, with Ex-US stocks underperforming US stocks recently. However, long-term data suggests having international exposure for portfolio balance. Dividend growth investing, especially internationally, offers hedged exposure in an environment of high inflation, rising rates, and low yields.
SCHY: A Strong International Dividend ETF
Schwab International Dividend Equity ETF (SCHY) tracks the Dow Jones International Dividend 100 Index, targeting income and quality international exposure. It uses similar methodology to SCHD, with adjustments for weighting and quality reinforcement. SCHY has outperformed VXUS since inception, delivering a 4.86% TTM dividend yield and early signs of dividend growth.
Key Advantages of SCHY
* Higher yield compared to VXUS and the Dow Jones US Dividend 100 Index
* Diversified sector tilt, providing exposure to various industries
* Focus on financial strength and quality, with higher profitability and earnings quality
* Consistent outperformance in major historical drawdown events
Diversification and Yield Opportunity
SCHY offers a diversified sector tilt and a higher yield spread compared to its benchmark. The average yield has been consistently higher since 2018, making it attractive for US investors seeking income opportunities.
Conclusion
While SCHY lacks a longer backtest history, its strong performance and attractive yield make it worth considering for international exposure. Investors can explore other international investment strategies, but SCHY remains a compelling option for quality dividend growth investing in an international context.