Why This International Dividend ETF is Outperforming in 2026

Core Insights - The Franklin International Dividend Booster Index ETF (XIDV) has outperformed the iShares Core MSCI EAFE ETF (IEFA) with a year-to-date return of 8.95% compared to IEFA's 8.75% [1] - XIDV's performance advantage is attributed to its rules-based dividend optimization framework, which focuses on higher-yielding, lower-volatility market segments [1] - The ETF's strategy aims to provide a dividend yield two to three times that of its parent index without using leverage or derivatives [1] Performance and Strategy - XIDV employs a three-stage optimization process to maximize dividend yield while controlling volatility and limiting concentration risk [1] - The ETF has minimal exposure to technology (~0.14%), contrasting with IEFA's significant tech weight, and instead focuses on sectors like European utilities, UK insurers, and Nordic banks [1] - The top holdings of XIDV include high-quality companies known for substantial dividend payouts, such as Carrefour SA (2.61%) and Engie SA (2.70%) [1] Income and Geographic Exposure - XIDV manages approximately $62 million in assets and has an expense ratio of 0.19%, offering a dividend yield around 6.7%, nearly double IEFA's ~3.5% yield [1] - The ETF includes about 7% Canadian exposure, benefiting from strong Canadian financials and energy sectors [1] - The structural edge of XIDV in emphasizing high dividend yield while maintaining volatility discipline is expected to remain relevant in the current market environment [1]