June 21, 2007: An ETF for a choppy market: iShares EPAC Select Dividend Income Fund (IDV)

Scrooge McDuck may like this fund.


Regular readers know that I am fond of dividends, so long as they are reasonably protected and reasonably certain to be increased in a timely fashion. Stocks and funds that provide a dividend yield floor have traditional been excellent performers in a choppy market. The dividend helps protect the price of the security. Of course, if inflation rears up in a significant and prolonged fashion, all bets are off.

iShares has recently launched a new ETF which has appeal for me, and may be worth a look for you as well. This ETF is the EPAC Select Dividend Income Fund (IDV) which represents non-US holdings that pay worthwhile dividends with the prospect of continued dividend enhancements.

IDV has a .50% expense ratio and is priced close to $50.00/share. The fund seeks investment results the mirror the Dow Jones EPAC Index and is proprietary.
The fund initially has approximately 43% in financials, 15% industrials, 14$ consumer services, 7% consumer goods, 7% telecommunications, 6% utilities, 6% basic materials, 2% oil and natural gas and less than 1% in tech and S-T securities.

Although a bit heavy on the financials, I will take the overall blend as it is uniquely light on natural resource stocks which many of us hold already.

The top holdings include:

Perpetual LTD
Commonwealth Bank of Australia
Westfarmers Limited
National Australia Bank
Royal Bank of Scotland
Sims Group LTD
Alliance & Leicester PLC
St. George Bank LTD
Telecom of New Zealand
Carpetright PLC
Great Southern LTD
Orient Overseas International LTD
Australia and NZ Banking Group
Westpac Banking Corp
Provident Financial PLC
HSBC Holdings PLC
Unilever NV-PLC
Tabcorp Holdings Limited
Singapore Petroleum Co Ltd
CLP Holdings LTD
Manitoba Telecom Services Inc
EMAP PLC
ENEL SPA
and three score more for very nice regional non-US diversification and currency hedging.

I am a likely buyer of this security, which may replace one or two holdings presently in my portfolios. Or, I may add it to continually overweight foreign market exposure without having to go somewhere in Bulgaria to find some naked ROW exposure.