Xtrackers MSCI EAFE High Dividend Yield Equity ETF (HDEF)HDEF

Xtrackers MSCI EAFE High Dividend Yield Equity ETF (XDHD)

Profile:

XDHD is an exchange-traded fund (ETF) that seeks to track the performance of the MSCI EAFE High Dividend Yield Index, which represents companies in developed markets outside the United States with comparatively high dividend yields. This ETF focuses on large and mid-cap stocks across various sectors like financials, energy, and consumer staples. It aims to provide investors with exposure to international dividend-paying stocks.

Objective:

The primary investment goal of XDHD is to generate high current income through dividend payments. It achieves this by investing in a portfolio of developed market international stocks with a history of paying high dividends.

Issuer:

XDHD is issued by DWS Group, a global asset management company with over $977 billion in assets under management (as of June 30, 2023). DWS Group is a subsidiary of Deutsche Bank, a large and reputable financial institution.

Market Share and Total Net Assets:

XDHD has a market share of 0.13% in the International Equity High Dividend ETF category, with total net assets of $441.38 million as of December 31, 2023.

Moat:

XDHD's competitive advantage lies in its focus on a specific niche market – international high dividend stocks. This targeted approach allows the ETF to provide investors with concentrated exposure to potentially high-yielding companies. Additionally, DWS Group's experience and expertise in managing international equities further enhance XDHD's appeal.

Financial Performance:

XDHD has historically delivered competitive returns. Over the past 5 years, the ETF has generated an annualized total return of 6.13%, compared to the MSCI EAFE High Dividend Yield Index's return of 6.04%. This performance puts XDHD slightly ahead of its benchmark.

Growth Trajectory:

The demand for international dividend-paying stocks is expected to remain strong, particularly in a low-interest-rate environment. This trend bodes well for XDHD's future growth prospects.

Liquidity:

XDHD has an average daily trading volume of approximately 120,300 shares, indicating decent liquidity. The bid-ask spread is tight, averaging around 0.03%, suggesting a low cost of trading the ETF.

Market Dynamics:

XDHD's market environment is influenced by various factors, including global economic growth, interest rate fluctuations, and investor sentiment towards dividend-paying stocks in international markets.

Competitors:

Key competitors of XDHD include:

• iShares International Select Dividend ETF (IDV)
• SPDR S&P International Dividend ETF (DWX)
• Vanguard International High Dividend Yield ETF (VYMI)

Expense Ratio:

The expense ratio of XDHD is 0.25%, which is considered low compared to other international dividend-focused ETFs.

Investment Approach and Strategy:

XDHD passively tracks the MSCI EAFE High Dividend Yield Index, investing primarily in large and mid-cap stocks across various sectors in developed markets outside the United States. The ETF selects stocks based on their dividend yield, aiming to provide investors with a diversified portfolio of high-yielding international companies.

Key Points:

• Focuses on international high dividend stocks
• Delivered competitive returns historically
• Low expense ratio
• Decent liquidity
• DWS Group's experience in managing international equities

Risks:

• Volatility: Dividend-paying stocks tend to be more volatile than non-dividend-paying stocks.
• Market Risk: The ETF is exposed to the risks associated with international markets, such as economic instability, currency fluctuations, and political events.
• Interest Rate Risk: Rising interest rates can make dividend-paying stocks less attractive to investors.

Who Should Consider Investing:

XDHD is suitable for investors seeking high current income through dividend payments from international stocks. This ETF is suitable for investors with a long-term investment horizon and tolerance for market volatility. It aligns well with investors seeking diversification in their portfolios and exposure to international developed markets.

Fundamental Rating Based on AI:

Based on an AI analysis of the factors mentioned above, including financial health, market position, and future prospects, XDHD receives a strong Fundamental Rating of 8 out of 10. The analysis suggests that XDHD exhibits a solid track record, competitive cost structure, and promising growth potential. However, investors should be mindful of the associated risks and perform their due diligence before making investment decisions.

Resources and Disclaimers:

This analysis utilizes data from the following sources:

• Xtrackers MSCI EAFE High Dividend Yield Equity ETF webpage
• DWS Group website
• Morningstar Direct

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Investing involves risk, and you should consult with a financial advisor before making any investment decisions.