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international stocks has long been unpopular and somewhat volatile, making some investors wary of expanding overseas. But new actively managed funds that focus on companies eager to grow dividends may offer more stability.
of Vanguard International Dividend Growth Rate (VIDGX) was released in November. Managed by the same Wellington management team as Vanguard Dividend Growth (VDIGX), a perennially prominent U.S. stock fund and two mutual funds that share the same investment philosophy and approach. In fact, this new fund is designed to be paired with a US-focused dividend growth fund.
homing in dividend growth “This is a way to find great companies,” said Peter Fischer, a manager who leads both the dividend growth and international dividend growth divisions as of the end of 2023. “Companies that are committed to paying and increasing dividends are disciplined in how they allocate capital,” he says. “These companies tend to be less risky, less cyclical businesses, and have clean balance sheets.” Ultimately, the bottom line is that high-quality companies that tend to do relatively well during market downturns A company portfolio is created.
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Mr. Fisher is no novice at investing in foreign stocks or high-dividend stocks. He has been working with Wellington’s Dividend Growth Strategy team since 2012. He has also been implementing global dividend growth strategies since 2016 and international dividend growth strategies for both high net worth and institutional clients since 2019.
This fund has an expense ratio of 0.54%, but is too new to talk about many details, including track record. But Fisher said the portfolio will include about 40 stocks in well-known multinational companies based in Europe, Japan, Hong Kong and Canada.
He expects the fund to yield about 3% and that the companies in its portfolio will average annual dividend increases of 10%.
And there will be very little turnover of names within the portfolio. “We’re buying to own for the life of the fund,” Fisher says. “We want to find a company that we can partner with and own for the long term.” We’ll be watching closely for now until we have a longer track record.
Note: This item first appeared in Kiplinger’s Personal Finance Magazine, your trusted monthly source of advice and guidance.Subscribe to help us make more money and keep more of what we earn here.
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