Thursday 10 January 2013

Portfolio Buy: ETF iShares EURO STOXX Select Dividend 30 (LSE:IDVY)

As a result of the rather freakishly high returns on the portfolio in 2012 I have decided to diversify a bit more outside the UK.

The problem is that this is administratively difficult to do on a DIY basis - particularly in relation to taxation. So I'm buying into a couple of high-yield ETFs, which do the admin for you, and diversify - but at a cost.

The first is the iShares EURO STOXX Select Dividend 30.

I have discussed Exchange Traded Funds or ETFs elsewhere on the blog and I already hold a couple from iShares (which have behaved quite well since purchase). ETFs are (generally) transparent, cost-efficient, liquid vehicles that trade on stock exchanges like normal securities.There are many exotic varieties of ETF but the only ones I am planning to invest in those that deal in high-yield shares or corporate bonds and which invest in physical securities, following a specific index.

This ETF (IDVY) aims to closely track the performance of the EURO STOXX® Select Dividend 30 Index, which offers exposure to the 30 highest dividend-paying Euro-zone stocks from each country out of the EURO STOXX® Index. Companies included must have a non-negative historical five-year dividend-per-share growth rate and a dividend to earnings-per-share ratio of less than or equal to 60%. The index is weighted according to net dividend yield.

The distribution yield is currently 5.85% and income is paid every quarter - but this is in Euros, so I am taking an additional currency risk here - which is new-ish for me. The ETF is priced in GBP (Pounds Stirling) on the LSE.

The biggest holding is...Banco Santander! So that sets the risk level pretty high.

Of course, you have to pay for this continental pleasure trip but the Total Expense Ratio is only 0.4%, much lower than tradition 'funds' that have provided such investment opportunities in the past.

Pass me a croissant...

[Purchase price: £13.10]

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.


  1. I also use ETFs a lot to gain exposure to ex-UK equities and bonds, but I'd recommend looking at other ETF providers as well as i-shares.
    I have the db-x Euro STOXX Sel div 30 ETF and the ter at 0.3% is slightly lower than i-shares.
    Other providers to compare are HSBC and SPDR.
    Keep up the good work.

    1. Thanks Steve - I'm planning to buy a few more, so I'll take your advice! (I have looked at SPDR, who have quite a range.)

  2. Since I bought IDVY, 6 or more years ago it is still showing nearly 40% loss, after having dividends reinvested.I cannot take this loss by selling, so I have started taking dividends.I am not happy with IDVY.

  3. Yes, timing can be a problem - and the Euroland crisis hasn't helped. However Bloomberg is showing this as up nearly 20% in one year and yielding over 5%. Worth topping up?