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Larry Berman CFA, CMT, CTA BMO International Dividend ZDI-T WEAK BUY Jul 14, 2025

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.

Larry Berman CFA, CMT, CTA

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COMMENT

The only issue he has with this is that these are all foreign dividends, so you are not getting the dividend tax credit. It is all coming in as straight income. Other than that, he has no problem with it.

DON'T BUY

The problem he has with this is that it is foreign income. As a result, you are not getting the dividend tax credit. This is not something he would be interested in.

COMMENT

Basically self-explanatory. 16% UK. Australia, France 13%. Some EAFE. Been around for quite some time. Do your homework. Dividends don’t qualify for the tax credit.

DON'T BUY

He prefers the US #1 right now. Internationally, he prefers the Asia-Pacific markets, such as AIA. ZDI has a lot of Europe, and this zone has a lot of issues. Europe is a value play. Start with the US, and expand from there. US is the cleanest shirt in the hamper right now.

COMMENT

International dividend payers are a lot higher than those in North America. The S&P yields below 2%; European payouts are over 3%. Given foreign withholdings, Canada is still the best place to invest for dividend payers in taxable accounts. It depends on your goal. He prefers ZWP or ZWE, which offers a covered call overlay to enhance yields in Europe (he's a defensive investor).

DON'T BUY

ZDH-T is the hedged version. He is okay with exposure to the unhedged version. He would rather get the international version with covered call overlay. ZHE-T/ZWP-T.

BUY

All the dividend payers outside of North America. Global dividend payers have a higher yield than domestic dividend players, but you do not get the benefit of the dividend tax credit. Internationally, you have more value stocks than growth stocks. It makes a lot of sense if you think growth is expensive and value will outperform.

BUY

Excellent option for quality oriented investors who like dividends. Good for a long term hold.

COMMENT

ZDI vs. VIDY -- international dividend ETF for non-registered account?

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.

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