Analyse: db x-trackers Stoxx® Global Select Dividend 100 UCITS ETF

Monadelphous statt Apple, Pitney Bowes statt Exon und Belgacom statt Microsoft: Dieser globale ETF gewichtet Aktien nach Dividendenrendite und nicht nach Marktkapitalisierung.

Rolle im Portfolio

The db x-trackers STOXX Global Select Dividend 100 ETF provides equity exposure to the highest dividend paying companies in America, Europe and Asia/Pacific. The index correlated 86% with the MSCI World Index over the last three years and therefore offers limited diversification benefits within a broader equity allocation.

As the index is well diversified across well over 10 countries and sectors around the globe, this ETF is best deployed as a core holding in a well diversified portfolio.

During the financial crisis many firms which were traditionally big dividend payers--in particular banks--had to cut their payouts and saw their share prices fall as investors fled to safe-havens. However, cost-cutting exercises left many companies with huge cash reserves which are now being returned to investors, in some cases even topping pre-crisis dividend payout levels. In particular, the utilities sector--representing 17% of the index’s value--often attracts investors because it has historically produced strong, stable cash flows and dividends.

As of 30 of August 2013 the fund had a dividend yield of 4.6%. In contrast, the dividend yield for the MSCI World Index was 2.6%. We see this ETF as suitable for investors with a favourable outlook on the global economy and in particular for those pursuing an income-enhancing strategy.

Because this fund’s benchmark index weights constituents by dividend yield, not by market capitalisation, investors won’t necessarily find the largest and most stable companies among its top holdings. The largest component stock of the STOXX Global Select Dividend 100 Index is Monadelphous Group Ltd., representing 2.3% of the index’s value. Pitney Bowes Inc. (2.2%) and Belgacom SA (2.1%) complete the top three holdings.

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Fundamentale Analyse

The global dividend outlook remains attractive. Many companies have deleveraged over the past months and years, leaving huge cash reserves on their balance sheets which are now being returned to investors. In particular, banks have cut – or intend to – their cash holdings by a good measure. According to the Financial Times, European banks have reduced their “liquidity pool” in recent months. Barclays plans to reduce its cash and government bonds by £15-20bn over the coming months, while Deutsche Bank has shrunk its liquid assets by €33bn to €117bn in the last three months, with a further reduction planed. Other European banks have announced similar moves.

Stock markets around the world have performed quite well so far into 2013; driven by an overall improving economic picture, though at varying degrees depending on the region. For example, the outlook for the US-economy remains mixed. Despite some volatile data, consumption and employment data have remained relatively stable over the past 12 months. US manufacturing seems to have picked up steam in recent months, with better auto sales and production providing support, in addition to inventory rebuild. Moreover, home resales reached a new 6.5 year high in August, while consumer spending rose for a fourth consecutive month as demand for auto sales hit a multiyear high.

However, concerns about the US government debt ceiling have resurfaced once more. Despite falling government expenditure over the last two years, the government is on course to breach its current debt ceiling in mid-October, while Congress struggles to agree on a new government funding plan. Against the backdrop of a government shutdown, which some economists warn could reduce Q4 GDP growth by up to 1.4%, the uncertainty surrounding the outcome of the debt ceiling discussion raises the risk of a potential US debt default, with even more serious consequences for the world’s economy.

The UK – the second largest country exposure in the index – continues to show encouraging data. According to the latest survey (e.g. composite PMI rose to 60.4 in September), the UK economy could expand by 1.2% y/y in Q3-13, mainly driven by an improving housing market. This would be a strong improvement on Q2-13, when the economy grew by 0.7%. However, some economists warn against excessive optimism; highlighting that consumer-facing services continue to struggle.

Australia – the third largest country exposure in the index – is also posting encouraging data. The country grew by 2.5% y/y in Q2-13, up from 2.5% the previous quarter. Analysts expected a slightly slower growth of 2.4% while forecasting full year growth of 3.25%. However, unemployment is on the rise, with some economists arguing that the economy needs to grow by at least 3% per year to start adding new jobs. Elsewhere, the Reserve Bank of Australia cut interest rates to a record low of 2.25% as it tries to support the employment-intensive industries, like residential construction.

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Indexkonstruktion

The STOXX Global Select Dividend 100 Index provides exposure to Global equities. The number of index constituents is fixed and includes the 100 highest dividend paying stocks in America, Europe and Asia/Pacific relative to their home market. Stocks are screened by historical non-negative dividend-per-share rates and dividend to earnings-per-share ratios. The constituents are weighted by their indicated annual net dividend yield and not market capitalisation. Therefore, one will find smaller companies in the index then normally expect in a broad based global index. The component stocks are capped at 15% of the index’s value and reviewed annually in March. As of writing, the heaviest country exposure is the US (26% of the index’s value), followed by the UK (15%) and Australia (9%). The index is heavily biased to financials which represent 33% of its value, followed by utilities (17%) and industrials (14%).

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Fondskonstruktion

As of writing, there are only two alternative providing exposure to global dividend stocks. The largest in terms of AUM is the iShares STOXX Global Select Dividend 100 (DE) ETF, using full replication and charging a TER of 0.45%. In addition, ETF Securities offers the swap-based ETFX Dow Jones Global Dividend Fund. The index is far less biased towards the US (17%), while Australia (18%) represents the largest share of the index. However, investors should keep in mind that with €5.6 million in AUM this ETF is only about 2% the size of the db x-trackers STOXX Global Select Dividend 100. However, there is no shortage of ETFs providing global equity exposure. The largest ETF in terms of total assets under management is the iShares MSCI World ETF, which uses optimised physical replication. The index is a market capitalisation weighted index representing 24 developed countries. The MSCI World is comprised of around 1600 stocks, heavily overweighting US equities (54% of the index’s value), followed by the UK (9%) and Japan (9%) On a sector level, financials are the biggest exposure representing about 21% of the index. This alternative is most suitable for investors with a stronger view on the US economy and a less bullish view on the UK compared to the ETF discussed here.

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Gebühren

The fund levies an all-in fee of 0.50%. This falls in the upper of the range for ETFs tracking global equity income. However, investors will incur additional costs on top of the published all-in fee, e.g. bid-ask spreads and brokerage fees when buying or selling ETFs.

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Alternativen

As of writing, there are five alternative providing exposure to global dividend stocks. The largest in terms of AUM is the iShares STOXX Global Select Dividend 100 (DE) ETF, using full replication and charging a TER of 0.45%.

However, there is no shortage of ETFs providing global equity exposure. The largest ETF in terms of total assets under management is the iShares MSCI World ETF, which uses optimised physical replication. The index is a market capitalisation weighted index representing 24 developed countries. The MSCI World is comprised of around 1600 stocks, heavily overweighting US equities (53% of the index’s value), followed by Japan (9%) and the UK (9%) On a sector level, financials are the biggest exposure representing about 21% of the index. This alternative is most suitable for investors with a stronger view on the US economy and a less bullish view on the UK compared to the ETF discussed here.

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Über den Autor

Gordon Rose, CIIA, CAIA,

Gordon Rose, CIIA, CAIA,  ist Fondsanalyst bei Morningstar.

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