Key Takeaways International dividend ETFs outperformed as Europe & global income stocks rallied hard in 2025.FDD ( 56.1%) and IDV ( 44.2%) led gains, proving dividends can thrive even in volatile markets.High yields diversification made dividend ETFs a steady play amid AI valuation and rate worries.Wall Street finished 2025 on an upbeat note. The S&P 500 finished the year with 16.39% gains, marking its third successive year of double-digit gains. The Nasdaq Composite surged 20.36%, thanks to sustained enthu ...

As the market broadens out heading into 2026, high-yield dividend stocks could be set to finally outperform the S&P 500.High-yield products appear to be gaining in popularity in 2025. Most of the excitement is centered around the single-stock, leveraged, and derivative income funds that are highly volatile and highly risky, but also offer attractive yields.I still prefer the more traditional high-income products. ETFs that invest in equities with above-average yields or use conservative covered-call strateg ...

Economic Outlook - Global economic growth is projected to be at its lowest levels since the pandemic, but the outlook has improved slightly due to increased AI-related investments offsetting U.S. import tariffs [1] - Fitch Ratings forecasts global economic growth of 2.5% in 2025 and 2.4% in 2026, a 0.1 percentage point upward revision from September [2] - OECD anticipates global GDP to decline from 3.2% in 2025 to 2.9% in 2026, before recovering to 3.1% in 2027 [2] Global Equity Performance - The S&P World Index has increased by 19.61% over the past year and 2.59% quarter to date, outperforming the S&P 500 [3] - Investors with portfolios concentrated in U.S. ETFs may have higher exposure to the information technology sector, particularly the "Magnificent 7" tech giants, which constitute about 35% of the S&P 500 [4] Investment Strategies - International equity ETFs provide a practical solution for investors looking to reduce U.S. asset exposure, offering diversification and potential for improved risk-adjusted returns [5] - In November, international equity ETFs experienced inflows of $24.6 billion [6] Market Conditions - Anticipation of a Fed rate cut in December is enhancing the attractiveness of global equities, with an 87.2% probability of a rate cut indicated by the CME FedWatch tool [7] - A declining U.S. dollar is also increasing interest in global equity funds, with the U.S. Dollar Index falling 0.54% over the past five days and 8.75% year to date [8] ETF Recommendations - Recommended international equity ETFs include Schwab International Equity ETF (SCHF), Schwab Fundamental International Equity ETF (FNDF), Dimensional International Core Equity Market ETF (DFAI), and Avantis International Equity ETF (AVDE), all with significant exposure to Japan, the U.K., and Canada [9][10] - For dividend-focused investments, options include WisdomTree International Hedged Quality Dividend Growth Fund (IHDG), Vanguard International Dividend Appreciation ETF (VIGI), and iShares International Select Dividend ETF (IDV), with yields of 2.55%, 1.86%, and 4.44% respectively [11][12] - Emerging market ETFs like iShares Core MSCI Emerging Markets ETF (IEMG), Vanguard FTSE Emerging Markets ETF (VWO), and iShares MSCI Emerging Markets ETF (EEM) have shown a gain of 17.92% over the past year [13]

Core Insights - The U.S. stock market has surged over 30% since April, but concerns about high valuations, particularly in artificial intelligence, are causing investor caution [1][2] - The "Buffett Indicator" suggests that the market capitalization of U.S. stocks, currently around $72 trillion, is more than double the GDP, indicating potential overheating [2][3] - In a volatile market, dividend-focused investments are becoming increasingly attractive as they provide a steady income stream [4] Market Valuation - The stock market's value has risen significantly, with the Buffett Indicator reaching levels last seen before the 2022 bear market, signaling potential overvaluation [2][3] - The ratio of total market capitalization to GDP indicates that the stock market is overheating, despite recent GDP growth [3] Dividend Investing - Dividend exchange-traded funds (ETFs) are gaining attention as investors seek stable income amidst market uncertainty [4] - Not all dividend stocks are equal; high-yield stocks provide current income, while those with dividend growth indicate quality investing [5] - The dividend yield on the S&P 500 is at its lowest since the dotcom bubble, prompting a shift towards higher-yielding dividend ETFs [5] ETFs Overview - **First Trust Dow Jones Global Select Dividend Index Fund (FGD)**: Up 0.2% in the past month, yields 4.95% annually, with fees of 56 bps [6] - **First Trust Morningstar Dividend Leaders Index Fund (FDL)**: Up 0.8% in the past month, yields 4.67% annually, with fees of 43 bps [7] - **iShares International Select Dividend ETF (IDV)**: Up 0.7% in the past month, yields 4.64% annually, with fees of 50 bps [8] - **State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD)**: Down 2.2% in the past month, yields 4.56% annually, with fees of 7 bps [9] - **Amplify CWP Enhanced Dividend Income ETF (DIVO)**: Down 1% in the past month, yields 4.58% annually, with fees of 56 bps [10]

Group 1 - The current AI boom may be experiencing irrational exuberance, with concerns from industry leaders like Google CEO Sundar Pichai and OpenAI CEO Sam Altman about a potential bubble [4][5][9] - If the AI rally collapses, it could have catastrophic effects on the broader market, prompting investors to shift towards defensive dividend ETFs to mitigate risks [6] - The SPDR Dow Jones Industrial Average ETF Trust (DIA) offers exposure to 30 blue-chip U.S. stocks, which tend to perform better during downturns, especially if the downturn is related to non-blue-chip sectors like AI [7][9] Group 2 - Many ETF holdings are heavily weighted towards Nvidia and other large-cap tech stocks, creating overlapping exposure that increases risk if the AI rally falters [8] - The iShares International Select Dividend ETF (IDV) currently yields 4.58% and benefits from the dollar's 10.6% depreciation against the Euro year-to-date, making it an attractive option for investors [9]

Economic Landscape - The current economic environment presents heightened uncertainty for investors, driven by concerns over AI bubbles, overvalued U.S. asset prices, and ongoing economic and geopolitical tensions [1] Investment Strategies - Broadening exposure to global equities is recommended as a strategy, with the S&P World Index gaining 16.39% over the past year and 0.91% quarter to date, outperforming the S&P 500 [2] Investor Sentiment - U.S. equity funds experienced a slowdown in demand, with only $1.15 billion added in the week ending Nov. 12, marking the weakest weekly net inflow since mid-October [3][4] - Inflows into U.S. large-cap funds dropped sharply to $2.35 billion from $11.91 billion the previous week, indicating a shift in investor sentiment [4] AI Bubble Concerns - There are growing concerns on Wall Street regarding a potential bubble in the AI sector, with fears that excessive capital inflow may obscure future revenue and profit visibility [5] Sector Exposure - Portfolios heavily invested in U.S. market indexes like the S&P 500 are significantly exposed to the information technology sector, particularly the "Magnificent 7" tech leaders [6] - Approximately 36% of the S&P 500 is allocated to information technology, highlighting the importance of managing concentration risk and ensuring diversification [7] International Equity ETFs - Adding international equity ETFs can enhance geographical exposure and improve overall diversification, with specific ETFs like Schwab Fundamental International Equity ETF (FNDF) and Dimensional International Core Equity Market ETF (DFAI) showing significant exposure to Japan, the U.K., and Canada [8][9] Dividend-Focused Funds - Global dividend-focused funds are recommended for reliable income during market volatility, with options like WisdomTree International Hedged Quality Dividend Growth Fund (IHDG) and Vanguard International Dividend Appreciation ETF (VIGI) offering attractive dividend yields [11][12] Emerging Market ETFs - Emerging market ETFs present opportunities for higher returns, with inflows of $2.17 billion in the week ending Nov. 12, marking a third consecutive week of additions [13] - The Dow Jones Emerging Markets Index has gained 21.05% over the past year and 1.05% quarter to date, indicating strong performance [13]

Core Insights - The U.S. government shutdown has ended, providing potential for a sustained rally in Wall Street, but global market stability remains uncertain due to high valuations in artificial intelligence [1] - Economic uncertainty and high market valuations are causing investors to be increasingly cautious, despite signs of easing U.S.-China trade tensions [2] Economic Indicators - Corporate layoffs surged by 183.1% in October, the highest increase in nearly two decades, attributed to cost-cutting and AI-driven restructuring [3] - Retail sales for the upcoming holiday season are expected to grow by 3.7% to 4.2%, reaching approximately $1.01 trillion to $1.02 trillion, although this growth is slower than the previous year's 4.3% increase [4] - The U.S. GDP growth rate for Q4 2025 is projected at 1.2% year over year, with S&P Global forecasting below-trend growth due to ongoing policy uncertainty [5] Market Valuation Concerns - The U.S. stock market has risen over 30% since April, but the "Buffett Indicator" suggests potential overheating, as the total market capitalization of U.S. stocks is now around $72 trillion, more than double the GDP [6][7] Investment Strategies - In a volatile market, dividend ETFs are becoming increasingly attractive for investors seeking steady income alongside capital gains [8] - Not all dividend stocks serve the same purpose; high-yield stocks provide current income, while dividend growth stocks indicate quality investing [9] - Low-priced dividend ETFs are recommended as they offer higher growth potential and affordability compared to higher-priced stocks [10] Dividend ETFs Overview - Schwab US Dividend Equity ETF (SCHD) priced at $27.16, yielding 3.80% annually [11][12] - Capital Group Dividend Value ETF (CGDV) priced at $43.37, yielding 1.28% annually [13] - State Street SPDR Portfolio S&P 500 High Dividend ETF (SPYD) priced at $43.25, yielding 4.52% annually [14] - iShares International Select Dividend ETF (IDV) priced at $38.36, yielding 4.53% annually [15] - First Trust Morningstar Dividend Leaders Index Fund (FDL) priced at $43.69, yielding 4.65% annually [16] - Amplify CWP Enhanced Dividend Income ETF (DIVO) priced at $45.53, yielding 4.46% annually [17]

Investment Trend Overview - The investment trend is shifting towards skepticism about American assets, with the iShares MSCI ACWI ex US ETF (ACWX) gaining 26.7% this year compared to a 14.8% increase in the SPDR S&P 500 ETF Trust (SPY) [1] U.S.-China Trade Relations - Recent easing of U.S.-China trade tensions and the Federal Reserve's rate cuts have not improved SPY's performance, which decreased by 0.03% over the past month, while ACWX increased by 0.5% [2] Factors Affecting U.S. Market Appeal - The decline in U.S. market attractiveness began in April following President Trump's "Liberation Day," which caused a selloff in U.S. stocks, bonds, and the dollar [3] - Uncertain policy sentiment and overexposure to U.S. assets are significant factors contributing to the U.S. market's waning appeal [5] Concentration Risks in U.S. Tech Sector - Concerns about AI-led bubbles and overvaluation are impacting major U.S. equity indexes, particularly due to the "Magnificent 7" companies, which constitute about one-third of the S&P 500's market cap [6] - In contrast, Europe's STOXX Europe 600 has a more balanced structure, with its top 10 stocks accounting for only 17% of the index's market cap across various sectors [7] Valuation Comparison - As of November 7, 2025, ACWX has a price-to-earnings (P/E) multiple of 18.44X, significantly lower than the iShares Core S&P 500 ETF (IVV) at 29.89X, indicating that international equities are undervalued [8] Performance of International Equities ETFs - The best-performing international equities ETFs of 2025 include: - First Trust Developed Markets ex-US AlphaDEX Fund (FDT) – Up 41.2% YTD - iShares International Select Dividend ETF (IDV) – Up 37.7% YTD - First Trust Developed Markets ex-US Small Cap AlphaDEX Fund (FDTS) – Up 37.6% YTD - Global X MSCI SuperDividend EAFE ETF (EFAS) – Up 31.5% YTD - Franklin FTSE Eurozone ETF (FLEU) – Up 34.4% YTD [9]

Group 1: Core Insights - The Schwab Fundamental International Equity ETF (FNDF) is a smart beta ETF that provides broad exposure to the Foreign Large Value ETF category, having debuted on 08/13/2013 [1] - FNDF is managed by Charles Schwab and has accumulated over $17.26 billion in assets, making it the largest ETF in its category [5] - The fund aims to replicate the performance of the Russell RAFI Developed ex US Large Co. Index (Net) before fees and expenses [5] Group 2: Cost and Performance - FNDF has an annual operating expense ratio of 0.25%, positioning it as one of the cheaper options in the ETF space [6] - The fund has a 12-month trailing dividend yield of 2.91% [6] - As of 08/22/2025, FNDF has increased by approximately 27.41% year-to-date and 18.74% over the past year, with a trading range between $32.25 and $42.27 in the last 52 weeks [9] Group 3: Holdings and Risk - FNDF's top holdings include Shell Plc (2.28% of total assets), Samsung Electronics Ltd, and Totalenergies (TTE), with the top 10 holdings accounting for about 11.8% of total assets [7][8] - The fund has a beta of 0.78 and a standard deviation of 15.58% over the trailing three-year period, indicating a medium risk profile [10] - FNDF consists of approximately 947 holdings, effectively diversifying company-specific risk [10] Group 4: Alternatives - Other ETFs in the Foreign Large Value segment include iShares International Select Dividend ETF (IDV) and Vanguard International High Dividend Yield ETF (VYMI), with assets of $5.79 billion and $11.85 billion respectively [12] - IDV has an expense ratio of 0.49%, while VYMI has a lower expense ratio of 0.17% [12]