Thursday 24 January 2013

Portfolio Buy: iShares DJ Asia/Pacific Select Dividend 30 (LSE:IAPD)


Continuing the theme of looking for high-yield Exchange Traded Funds (ETFs) around the world, here is one that targets dividend shares in Asia/Pacific - with a heavy emphasis on Australia and New Zealand.

ETFs offer an accessible and reasonably-priced way into internation markets with a diversified fund that follows (fairly mechanically) a specific market index.

The iShares DJ Asia/Pacific Select Dividend 30 ETF comes from the Ireland-based iShares stable, managed by BlackRock, and consists of physical holdings that attempt to replicate the Dow Jones Asia/Pacific Select Dividend 30 Index as closely as possible. The ETF invests in physical index securities that offer exposure to the 30 highest dividend-paying stocks from developed countries in Asia/Pacific. The companies included are required to have a non-negative historical three-year dividend-per-share growth rate and an average dividend to earnings-per-share ratio of less than 85%. The index is weighted according to dividend yield.

The Total Expense Ratio is a reasonably modest 0.59% and the ETF is quoted in Stirling in London, although the fund currency is US$. Distributions are quarterly and the holdings are rebalanced annually.

The US$ distribution yield is currently quoted as 4.77% on the ETF website - what UK holders will receive will obviously depend on a string of exchange rates. The ETF has performed very well recently - which might mean that this is the wrong time to buy...

The 30 holdings are concentrated in Financials, Telecommunications, Consumer Services and Industrials and 8 of the top 10 holdings are from Australia (the biggest holding - representing over 7% of the fund - is from New Zealand).

[Purchase price: £21.15]

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 comment:

  1. Well, great minds thinking alike again? ;-)
    I bought some IAPD at the beginning of 2012 and the return has been approx 6% pa, though likely to be a bit less if bought now.
    Keep 'em coming!
    PS Also have EMDV and SEDY.