How do I invest in dividend stocks worldwide?

An investment in high-dividend-yielding stocks is seen as a solid investment. Dividends are usually paid by profitable and established companies. For investors seeking regular income in times of low interest rates, dividend stocks can provide attractive yields.

There are different index concepts available for investing with ETFs in global high-dividend equities. This Investment Guide for global dividend stocks will help you to differentiate between the most important indices and to select the best ETFs tracking indices on global dividend stocks.

The best global dividend ETF by 1-year fund return as of 31-10-2024

All global dividend ETFs ranked by fund return

The largest global dividend ETF by fund size in EUR

All global dividend ETFs ranked by fund size

The cheapest global dividend ETF by total expense ratio

All global dividend ETFs ranked by total expense ratio

Methodologies of the compared indices

Source: justETF Research; as of 28/02/22

FTSE All-World High Dividend Yield index

The FTSE All-World High Dividend Yield index tracks high dividend stocks from developed and emerging economies worldwide. Selecting the stocks with the highest dividend yields from its parent index, the FTSE All-World index (excluding REITs), the FTSE All-World High Dividend Yield index aims to reflect 50 percent of the parent index. With 2.165 constituents (as of 28-06-2024), the FTSE All-World High Dividend Yield index is by far the largest available dividend index. The selection method is rather straightforward and based on the expected dividend yield for the next 12 months. The selected companies are weighted by their free float market cap.

Methodology of the FTSE All-World High Dividend Yield Factsheet Methodology

• 2.165 stocks from developed and emerging economies worldwide (as of 28-06-2024)
• Investment universe: FTSE All-World index, which comprises 4.291 constituents (as of 28-06-2024), excluding REITs
• Stock selection is based on the expected dividend yield for the next 12 months
• Selection criteria: stocks with the highest dividend yields from investment universe (appr. 50 percent of the investable market capitalisation)
• Index rebalancing takes place semi-annually in March and September
• Index weighted by free float market capitalisation

MSCI World High Dividend Yield ESG Reduced Carbon Target Select index

The MSCI World High Dividend Yield ESG Reduced Carbon Target Select index focuses on the highest dividend stocks from developed countries worldwide. This dividend index includes 177 companies (as of 28-06-2024) which are selected according to quality factors and dividend strength. The selection criteria include a dividend yield of at least 30 percent above the average of the underlying index (MSCI World index) and a non-negative dividend growth rate over the last 5 years. Moreover, the stocks included are filtered according to ESG criteria (environmental, social and corporate governance). The selected stocks are weighted by their free float market capitalization.

Methodology of the MSCI World High Dividend Yield ESG Reduced Carbon Target Select Factsheet Methodology

• 177 dividend stocks from developed countries worldwide (as of 28-06-2024)
• Investment universe: MSCI World index, which comprises 1.410 shares (as of 30-09-2024), excluding REITs
• Stock selection is based on the indicated dividend yield
• Selection criteria: quality factors, dividend yield of at least 30% above the average of the underlying index, non-negative dividend growth over 5 years, ESG criteria (environmental, social and corporate governance)
• Index rebalancing takes place semi-annually in May and November
• Index weighted by free float market capitalization
• Maximum weight per individual stock is 5%

S&P Global Dividend Aristocrats index

The S&P Global Dividend Aristocrats index aims at long-term and sustainable dividend growth. It is based on the S&P Global Broad Market Index (BMI), which tracks stocks from developed and emerging economies worldwide. A company is only included in the S&P Global Dividend Aristocrats index if it has at least 10 consecutive years of a controlled dividend policy with rising or stable dividend payments. In addition, pre-defined yield criteria must be met. Despite the strict inclusion rules, the limits for individual securities, sector and country weightings ensure that no cluster risks arise in the index. The selected stocks are weighted by their indicated dividend yield.

Methodology of the S&P Global Dividend Aristocrats Factsheet Methodology

• Appr. 100 dividend stocks from developed and emerging economies worldwide
• Investment universe: S&P Global Broad Market Index (BMI), which includes 14,542 stocks (as of 28/02/22)
• Stock selection is based on the indicated and the historical dividend yield
• Selection criteria: controlled dividend policy with rising or stable dividends for at least 10 consecutive years
• Index rebalancing takes place annually in January, reviews take place monthly
• Index weighted by indicated dividend yield
• Weight per individual stocks is capped at 3%; weight per sector/country is capped at 25%; maximum of 20 stocks per country

SG Global Quality Income index

The SG Global Quality Income index tracks 25 to 75 high dividend stocks from developed economies worldwide. Financials are excluded. The selection process of the SG Global Quality Income index is based on comprehensive quality criteria (with respect to profitability, solvency, internal efficiency) and balance sheet valuation. To be selected, a firm’s dividend yield must be at least 4 percent. Both the expected and the indicated dividend yield are taken into account. A special feature of the index is the equal weighting of all selected dividend stocks.

Methodology of the SG Global Quality Income Factsheet Methodology

• 25 to 75 dividend stocks from developed countries worldwide (excluding financials)
• Stock selection is based on dividend yield
• Selection criteria: quality factors, balance sheet valuation, dividend yield (at least 4%)
• Index rebalancing on quarterly basis
• Equal weighting of all securities in the index
• Index constructed by Société Générale and calculated by Solactive

STOXX® Global Select Dividend 100 index

The STOXX® Global Select Dividend 100 index includes a selection of 100 companies from developed countries worldwide that meet criteria for high dividend quality. The global index is formed from the three regional indices STOXX® Europe Select Dividend 30, STOXX® North America Select Dividend 40 and STOXX® Asia/Pacific Select Dividend 30. Securities are selected in the sub-regions based on their indicated dividend yield and their historical dividend policy. The selected stocks are weighted by their indicated dividend yield.

Methodology of the STOXX® Global Select Dividend 100 Factsheet Methodology

• 100 dividend stocks from developed countries worldwide
• The index contains 40 stocks from North America, 30 stocks from Europe and 30 stocks from Asia-Pacific
• Investment universe: The STOXX® Global 1800 index
• Stock selection is based on the indicated dividend yield. In addition, companies must meet certain requirements with respect to dividend quality and payout ratio
• Selection criteria: positive dividend growth over five years, dividend payments in four of the last five years, non-negative payout ratio (max. 60%)
• Index rebalancing takes place annually in March
• Index weighted by indicated dividend yield

When choosing a global dividend ETF one should consider several other factors in addition to the methodology of the underlying index and performance of an ETF. For better comparison, you will find a list of all global dividend ETFs with details on size, cost, age, income, domicile and replication method ranked by fund size.

Compare all global dividend ETFs in detail
Compare all global dividend ETFs in a chart

Source: justETF.com; As of 20-11-2024

Return comparison of all global dividend ETFs

The table shows the returns of all global dividend ETFs in comparison. All return figures are including dividends as of month end. Besides the return the reference date on which you conduct the comparison is important. In order to find the best ETFs, you can also perform a chart comparison.

• Cumulative
• Calendar year

Source: justETF.com; As of 31-10-2024; Calculations in EUR including dividends