Opinions
Richard Croft
BMO International Dividend
ZDI-T
COMMENT
Jun 29, 2015
Stock price when the opinion was issued
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ZDI uses the MSCI World Universe International Developed Markets index, which does not include exposure to South Korea. VIDY uses the FTSE series, which does include South Korea. That's the main difference, along with a slight difference in MER (ZDI slightly more expensive).
Focus on the exposure, not the MER. You have to make a call whether there are enough good dividend-paying stocks in South Korea to want to choose VIDY. Remember, these dividends don't get preferential tax treatment, it's all income. So if you're looking for income in your taxable portfolio, you get a much better tax experience with capital gains from the covered call overlay.
In general, international dividends pay a higher yield than you get in the US. This one is international developed markets, largely Europe and Japan. You don't get the benefit of the dividend tax credit. This investment should be in a registered account, not in a taxable account, if you're looking to maximize your after-tax return. He has no problem with it from that perspective.
But if you're really looking for enhanced yield out of Europe, he really likes ZWP or ZWE.
Allocation of 15% of a portfolio in dividend paying stocks in developed countries outside of North America? If you are putting 15% of your money diversified geographically, outside of North America, this is fine. With this amount, he would presume you are a growth investor. The fact that you are buying an ETF of essentially dividend stocks, leads him to think that you like the income. Because of this, he is not sure he would go as high as 15%. He would go around 10%.