- The ALPS International Sector Dividend Dogs ETF (IDOG) rallied 2.29% in March, outpacing US and international equities as the Fund’s deep-value portfolio of developed international names benefitted from an improving rate outlook and stimulus measures among European NATO countries, while US stocks digest mounting trade tensions and a paradigm shift out of concentrated growth stocks.
- IDOG’s overweight to deep-value stocks in Europe led its performance over the MSCI EAFE Index in March as European Union members announced plans to invest hundreds of billions of dollars in defense and infrastructure through 2030 in response to the US pulling back aid from Ukraine. French construction company, Bouygues SA (EN FP, 2.07% weight*), gained over 14% last month on the EU spending catalyst, while also raising FY 2025 sales estimates as analysts project construction company profits to rise over the next decade. Also moving higher on the fiscal stimulus announcement, German freight and logistics company, DHL Group (DHL GR, 1.89% weight*), jumped 8.77% in March while also reporting a Q4 earnings before interest and taxes (EBIT) beat driven by higher revenues within its international express shipping unit.
- Financials names led Fund performance within IDOG’s sector allocation in March on a wave of share buybacks and broadly improving loan growth as central banks cut rates into a more positive yield environment for banks and lenders. IDOG banks, BNP Paribas (BNP FP, 2.07% weight*), Santander Bank Polska S.A. (SPL PW, 1.99% weight*) and Credit Agricole SA (ACA FP, 2.09% weight*) all returned over 8% last month on a strong earnings season and continued optimism for European Financials. Additionally, IDOG’s Energy sector names were among the top performers for the Fund in March, led by Orlen SA (PKN PW, 2.06% weight*) and Aker BP ASA (AKRBP NO, 2.25% weight*), gaining 11.75% and 14.47%, respectively, on higher profit expectations for European energy producers as oil and gas inventories drop in the US, adding to upward pressure on prices as Europe faces low storage levels heading into the summer.
“Political uncertainty in France and Germany has come down … The prospects for a cease-fire in Ukraine, potentially a resolution of the war in the future and the recent under-performance of US equities are making European equities more attractive now.”
– Frederic Dodard, State Street Global Advisors Head of Asset Allocation, March 21, 2025
International Stocks are Poised to Benefit from a Drop in US Exceptionalism
- As investor sentiment wanes in the US with nearly all Magnificent 7 names down 10% or more through Q1 on declining growth expectations and fears of trade tensions, Europe and other international developed markets are bucking the 21st century trend of US exceptionalism in stock returns on the back of easing measures by central banks and a weaker US dollar leading to higher foreign profits. The Eurozone in particular stands to benefit from broad increase in forward earnings expectations with a massive wave of stimulus targeting national defense and infrastructure, where European NATO countries are expected to increase defense spending to a minimum of 3% of GDP by 2030, requiring a material increase from the current EU average at 2% of GDP. These estimates for fiscal policy and stimulus measures may prove to be conservative, as evidenced by Germany’s announcement for a $500 billion national defense and infrastructure spending plan (~11.6% of GDP) over the coming years.
- Valuations alone provide a strong case for a reversion to the mean of developed international stock returns, and their low correlation to US equities offers an attractive alternative to diversify away from the Trump-risk and more expensive broad-based US indices. The more opportunistic pockets of international stocks continue to be low-multiple stocks among materials, electrical power and equipment producers, utilities and industrials, where fiscal spending measures and lower expected interest rates are leading to a wave of positive earnings revisions. The ALPS International Sector Dividend Dogs ETF (IDOG) provides an equal-weighted sector exposure to deep-value, developed international stocks that may benefit from a broadening out of sector returns and an industrial bull market across Europe with a favorable price-to-earnings (P/E) ratio of 11.03x, which is over 5 turns cheaper than the P/E of 16.20x for broad-based international stocks.^^
- The US stock market^ just registered its worst quarter of performance relative to developed international stocks since 2002. Meanwhile, IDOG’s deep-value international portfolio has flourished year-to-date, outperforming the MSCI EAFE Index by 277 basis points (bps) and the S&P 500 Index by 1,408 bps.
- As of 03/31/2025, IDOG exhibits a more appealing trailing twelve month (TTM) yield of 4.81% compared to the MSCI EAFE Index yield of 3.00% due to its overweight to cheaper, cyclical sectors that are expected to be key drivers of ex-US earnings growth.
Performance Summary
| Cumulative | Annualized |
|||||||
| 1 M | YTD | 1 Y | 3 Y | 1 Y | 5 Y | 10 Y | SI | |
| IDOG - NAV (Net Asset Value) | 2.29% | 9.80% | 11.22% | 28.23% | 11.22% | 14.18% | 6.02% | 6.35% |
| IDOG - Market Price | 3.14% | 10.71% | 11.93% | 29.50% | 11.93% | 14.71% | 6.09% | 6.34% |
| S-Network International Sector Dividend Dogs Index - NTR | 2.33% | 9.93% | 11.64% | 29.78% | 11.64% | 14.66% | 6.42% | 6.77% |
| Morningstar Developed Markets ex-North America Index - NTR | -0.11% | 6.45% | 4.73% | 16.89% | 4.73% | 11.42% | 5.30% | 5.95% |
Source: Bloomberg L.P. and SS&C ALPS Advisors, as of 03/31/2025
Performance data quoted represents past performance. Past performance is no guarantee of future results so that shares, when redeemed, may be worth more or less than their original cost. The investment return and principal value will fluctuate. Current performance may be higher or lower than the performance quoted. For current month-end performance call 1-866-759-5679 or visit www.alpsfunds.com. Performance includes reinvested distributions and capital gains.
Market Price is based on the midpoint of the bid/ask spread at 4 p.m. ET and does not represent the returns an investor would receive if shares were traded at other times.
Fund inception date: 06/27/2013
Total Operating Expenses: 0.50%
* Weight in IDOG as of 03/31/2025
30-Day SEC Yield as of 03/31/2025: 5.34%
^ Source: Bloomberg, as of 03/31/2025, US stock market represented by the S&P 500 Index
^^ Source: Bloomberg, as of 03/31/2025, broad-based international stocks represented by the MSCI EAFE Index
Top 10 Holdings
| Aker BP ASA | 2.25% | Imperial Brands PLC | 2.11% | |
| Repsol SA | 2.17% | Singapore Telecommunications L | 2.11% | |
| Enel SpA | 2.17% | Telenor ASA | 2.10% | |
| Hong Kong & China Gas Co Ltd | 2.16% | Credit Agricole SA | 2.09% | |
| Japan Tobacco Inc | 2.15% | Woodside Energy Group Ltd | 2.09% |
As of 03/31/2025, subject to change
Important Disclosures & Definitions
An investor should consider the investment objectives, risks, charges and expenses carefully before investing. This material must be preceded or accompanied by the prospectus. Read the prospectus carefully before investing.
Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemable.
Performance data quoted represents past performance. Past performance is no guarantee of future results; current performance may be higher or lower than performance quoted.
All investments are subject to risks, including the loss of money and the possible loss of the entire principal amount invested. Additional information regarding the risks of this investment is available in the prospectus.
The Fund is subject to the additional risks associated with concentrating its investments in companies in the market sector.
Diversification does not eliminate the risk of experiencing investment losses.
The Fund’s investments in non-US issuers may involve unique risks compared to investing in securities of US issuers, including, among others, less liquidity generally, greater market volatility than US securities and less complete financial information than for US issuers. In addition, adverse political, economic or social developments could undermine the value of the Fund’s investments or prevent the Fund from realizing the full value of its investments. Finally, the value of the currency of the country in which the Fund has invested could decline relative to the value of the US dollar, which may affect the value of the investment to US investors.
The Fund employs a “passive management” - or indexing - investment approach and seeks investment results that correspond (before fees and expenses) generally to the performance of its underlying index. Unlike many investment companies, the Fund is not “actively” managed. Therefore, it would not necessarily sell or buy a security unless that security is removed from or added to the underlying index, respectively.
30-Day SEC Yield: reflects the dividends and interest earned during the period, after the deduction of the Fund's expenses.
Basis Point (bps): a unit that is equal to 1/100th of 1% and is used to denote the change in a financial instrument.
Bull Market: a financial market in which prices are trending upward or are expected to trend upward.
Magnificent 7: a group of seven high-performing and influential stocks in the technology sector including Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta.
Morningstar Developed Markets ex-North America Index: measures the performance of companies in developed markets ex-North America. It covers approximately 97% of the full market capitalization in the Developed Markets ex-North America.
MSCI EAFE Index: an equity index which captures large- and mid-cap representation across 21 developed markets countries around the world, excluding the US and Canada, covering approximately 85% of the free float-adjusted market capitalization in each country.
Price/Earnings (P/E) Ratio: a valuation ratio of a company's current share price compared to its per-share earnings.
S-Network International Sector Dividend Dogs Index (IDOGX): a portfolio of stocks derived from a universe of mainly large capitalization stocks domiciled in developed markets outside the Americas (the “S-Network Developed International Equity 1000 Index”). The IDOGX methodology selects the five stocks in each of the ten GICS sectors that make up the universe which offer the highest dividend yields as of the last trading day of November. The fifty stocks that are selected for inclusion in the portfolio are equally weighted.
S&P 500 Index: widely regarded as the best single gauge of large-cap US equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization.
Trailing Twelve Month Yield: refers to the percentage of income a portfolio has returned to investors over the last 12 months.
One may not invest directly in an index.
ALPS Advisors, Inc., registered investment adviser with the SEC, is the investment adviser to the Fund. ALPS Advisors, Inc. is affiliated with ALPS Portfolio Solutions Distributor, Inc.
ALPS Portfolio Solutions Distributor, Inc. is the distributor for the Fund.
Not FDIC Insured • No Bank Guarantee • May Lose Value
DOG001473 07/31/2025
