After a year of tracking international markets, these three dividend ETFs have stood out as top performers, offering investors a chance to profit from the outperformance of international developed stocks over the S&P 500. The Amplify CWP International Enhanced Dividend Income ETF (IDVO), Schwab Fundamental International Large Company Index ETF (FNDF), and Avantis International Equity ETF (AVDE) each have their own unique approach to generating income, providing investors with a range of options to suit different risk appetites and investment goals.
Personally, I find the IDVO particularly intriguing. Its active dividend strategy, combined with covered calls, results in a monthly payout that has been steadily rising. This is a significant advantage over many other funds, which typically pay out quarterly or semi-annually. The fund's performance has been strong, with an 11.2% year-to-date return and a 32% gain over the past year. However, the tradeoff is that the options overlay caps the upside in a strong rally, which may be a concern for investors seeking maximum gains.
The FNDF, on the other hand, is a more passive approach to international value investing. Its fundamental weighting tilts the portfolio towards larger, more profitable, and cash-returning businesses, resulting in a consistent increase in payouts. While the distributions are lumpy, the low cost and annual rebalancing make it an attractive option for long-term investors.
The AVDE is a multi-factor approach that reaches further down the cap spectrum and into pockets of the international market that pure dividend screens often miss. This provides investors with exposure to smaller European and Japanese industrials that have been quietly leading the 2026 rally. However, if you are primarily seeking income, the IDVO is the better fit.
What makes these funds particularly fascinating is that they are capturing the benefits of a softer dollar in 2026, which has made foreign-currency dividends translate into more U.S. dollars for the same payout in euros, yen, or pounds. This is a significant advantage for U.S. investors, as it increases the overall return on these funds. However, it's important to note that international funds carry foreign-currency exposure, which can be a double-edged sword. If the dollar strengthens, the tailwind becomes a headwind, and a year of outperformance can narrow quickly.
In my opinion, the choice between these funds depends on the investor's goals and risk appetite. Retirees or those seeking predictable monthly cash flow should consider the IDVO, while investors building a long-term international core will benefit from the FNDF's fundamental weighting and lower cost. The AVDE is a good option for those seeking a broader, multi-factor approach with exposure to smaller international names.
One thing that immediately stands out is the importance of understanding the currency exposure of these funds. While it has been a tailwind in 2026, it can quickly become a headwind if the dollar strengthens. This is a critical factor to consider when sizing the position in these funds.
In conclusion, these three dividend ETFs offer investors a range of options to profit from the outperformance of international developed stocks. Whether you're seeking predictable monthly income, a long-term international core, or a broader, multi-factor approach, there is a fund that suits your needs. However, it's important to carefully consider the currency exposure and the tradeoffs of each fund before making an investment decision.
