iShares International Dividend Growth ETF

IGRO

Market cap $1.24B

iShares International Dividend Growth ETF offers diversified exposure to 557 international stocks with at least five years of dividend growth. IGRO has low exposure to China-related geopolitical risk but is heavily weighted in financials (30.7%). The fund has underperformed the ex-U.S. equity benchmark IXUS since inception, and lagged it by 10.2% over the last 12 months.

Renewed transatlantic trade tensions and a complex geopolitical landscape heighten U.S. economic volatility, prompting investors to turn to global equity funds.

IGRO hits a new 52-week high as strong global markets and rising demand for income-generating ETFs fuel momentum.

iShares International Dividend Growth ETF is rated a hold due to portfolio flaws and the availability of superior alternatives like LVHI. IGRO's backward-looking dividend growth strategy lacks quality screens, resulting in higher volatility, sector/geographic concentration, and underperformance versus LVHI. LVHI outperforms IGRO on risk-adjusted returns, yield, and liquidity, making it a more compelling choice for global ex-US dividend exposure.

IGRO which follows a group of 450 international dividend growers has generated returns of close to 15% and outperformed global markets by around 330 bps this year. We measure how IGRO stacks up against its more popular peer- VIGI. While IGRO's portfolio may appeal to those fishing for beaten down and cheaply valued opportunities across the globe, we find that the risk-reward on the standalone chart is not ideal.

The U.S. remains the dominant global economic power, but ongoing trade tensions may threaten its long-term leadership. I continue to invest in American businesses, but believe diversifying internationally is prudent for long-term wealth building. Uncertainty from U.S. trade policies could prompt other nations to unify and reduce reliance on America, shifting global dynamics.

International stocks remain significantly undervalued, presenting a potential investment opportunity for retail investors. Key indexes like the Dow Jones International Dividend 100 and Morningstar Global ex-US Dividend Growth Index guide investment strategies in this matchup. Funds talked about investing in ADRs, GDRs, EDRs, and up to 20% in futures, options, swaps, cash, and equivalents.

With a flip of the switch, BlackRock ( NYSE:BLK ) recently completed the company's first mutual fund-to-ETF conversion, a move made to meet investors' insatiable thirst for active management.

IGRO focuses on owning high-quality dividend-growth companies domiciled outside of the US. I see value in the fund given its low 14x P/E, while the sector breakdown is diversified. With bullish seasonality in play, I highlight key price levels to monitor.

A diversified portfolio of dividend-paying stocks is likely to perform well when interest rates are lowered. International stock valuations are not as inflated as U.S. stocks, offering the potential for more affordable purchases. The healthcare sector provides stability and dividend payments, making it appealing during market volatility, and it is the second-largest sector in IGRO.