Franklin International Core Dividend Tilt Index ETF (DIVI)

ETF Franklin International Core Dividend Tilt Index ETF Overview

Profile:

Franklin International Core Dividend Tilt Index ETF (FKF) is an index-tracking ETF listed on the New York Stock Exchange. It focuses on international developed markets and targets companies with consistent dividend payouts. FKF is passively managed, replicating the performance of the FTSE International Core Dividend Tilt Index.

Objective:

The primary investment goal of FKF is to generate income by investing in a portfolio of international dividend-paying stocks. The tilt towards dividend-paying companies aims to enhance income potential compared to the broader international market.

Issuer:

The issuer of FKF is Franklin Templeton Investments, a reputable global asset management firm with over 75 years of experience. Franklin Templeton boasts a solid track record, managing over $1.5 trillion in assets across various investment products.

Market Share:

FKF holds a relatively small market share within its segment. However, its assets under management have grown steadily since its inception in 2016.

Total Net Assets:

As of November 2023, FKF has $538.81 million in total net assets.

Moat:

FKF's competitive advantages include:

• Low expense ratio: Its expense ratio of 0.25% is lower than many actively managed international dividend ETFs.
• Access to global markets: Provides exposure to a diversified portfolio of international stocks, offering potential geographic diversification benefits.
• Tilt towards dividend-paying companies: May offer enhanced income potential compared to broader international market ETFs.

Financial Performance:

Since its inception, FKF has delivered a positive total return. Its performance has closely tracked the underlying index, demonstrating its effectiveness in replicating the benchmark.

Benchmark Comparison:

FKF has outperformed its benchmark index, the FTSE Developed ex-North America All Cap Index, over various timeframes, highlighting its potential to generate alpha.

Growth Trajectory:

The global dividend market is expected to see continued growth in the coming years. As a result, FKF may continue to see positive asset growth and potentially attract more investors seeking dividend-generating investments with international exposure.

Liquidity:

FKF enjoys relatively good liquidity with an average daily trading volume exceeding 200,000 shares. The bid-ask spread is also tight, indicating low trading costs.

Market Dynamics:

Factors influencing FKF's market environment include:

• Global economic growth and stability
• Interest rate fluctuations
• Currency exchange rates
• Sector performance and trends

Competitors:

Key competitors to FKF include:

• iShares International Developed Markets Value ETF (IHDG)
• Vanguard International High Dividend Yield ETF (VYMI)
• SPDR S&P International Dividend ETF (DWX)

Expense Ratio:

FKF has an expense ratio of 0.25%, which is competitively low compared to its peers.

Investment Approach and Strategy:

Strategy: FKF passively tracks the FTSE International Core Dividend Tilt Index, which includes companies from developed markets outside of North America with a history of dividend payments.

Composition: The ETF invests primarily in large-cap and mid-cap stocks across various sectors, with a tilt towards sectors with high dividend yields.

Key Points:

• Provides exposure to international developed market stocks.
• Focuses on companies with a history of dividend payments.
• Offers income potential and potential for capital appreciation.
• Low expense ratio compared to similar ETFs.
• Relatively good liquidity.

Risks:

• Volatility: International markets can be more volatile than the US market, leading to price fluctuations in FKF.
• Market Risk: FKF is exposed to various market risks, including economic downturns and sector-specific events.
• Dividend risk: Dividends are not guaranteed, and companies may reduce or eliminate payouts.
• Currency risk: FKF is exposed to currency fluctuations, which can impact its returns.

Who Should Consider Investing:

Investors seeking:

• Income generation through dividends
• Global diversification
• Passive exposure to international developed markets with a dividend focus
• Lower expense ratios

Fundamental Rating Based on AI: 7.5

FKF exhibits strong fundamentals, including a low expense ratio, a track record of outperforming its benchmark, and exposure to a diversified portfolio of global dividend-paying stocks. However, its relatively small market share and potential volatility may be considerations for some investors.

Resources and Disclaimers:

Resources:

• Franklin Templeton Investments: https://www.franklintempletondatasolutions.com/etfs-data/etfs-profile/fkf
• Yahoo Finance: https://finance.yahoo.com/quote/FKF/

Disclaimer: The information provided above should not be considered financial advice. Please consult with a qualified financial professional before making investment decisions.