International Stocks & IDOG Showing Strength as Valuations Begin to Matter

• The ALPS International Sector Dividend Dogs ETF (IDOG) gained 2.91% in February as large-cap international developed stocks outperformed US large-cap stocks for the second consecutive month, with investors flocking to value stocks thus far in 2025. International developed markets are seeing the most success in their battle to lower inflation, specifically in Europe, as central banks continue to cut interest rates to help set up stronger earnings growth in 2025.  
  
  
• IDOG’s overweight to France (18.42% weight*) was a major contributor to its outperformance last month, where French equities bounced back on improving budget concerns and political sentiment after a politically volatile 2024. Leading IDOG’s allocation in France, investment bank, BNP Paribas (BNP FP, 2.32% weight*), returned 10.93% last month after reporting strong results that saw a 30% year-over-year jump in revenues across both equities and fixed-income trading. Similarly, in France’s Financials sector, Credit Agricole S.A. (ACA FP, 2.28% weight*), gained over 10% in February following better earnings growth and margins in its asset management and insurance segments.
  
  
• While European Financials were the best-performing sector in February, IDOG’s top-performing stock last month was Polish utility, Orlen SA (PKN PW, 2.46% weight*), as the company rallied over 18% after boosting its dividend due to stronger upstream energy profitability on higher natural gas prices and electricity demand. Additionally, Telia Co (TELIA SS, 2.22% weight*), a Swedish telecom company, rose 12.19% last month after announcing the sale of its TV4 Media unit in a deal estimated to be worth roughly 5% of Telia’s market cap, allowing the company to pay down its debt. French telecom name, Orange SA (ORA FP, 2.26% weight*), also gained 11.34% in February after management boosted profit growth estimates for 2025 on improving operational performance. Lastly, network equipment provider, Telefona LM Ericsson (ERICB SS, 1.88% weight*), rebounded over 8% on the month after announcing a reorganization to help improve its efficiency and margins.
  

“Strong business confidence is overwhelming tariff and trade worries as the global economy shows signs of picking up steam rather than slowing down. This is causing the bull run in Equities to spread out from the US into other countries which have begun to outperform the US.”

– Merrill Lynch, Chief Investment Office, February 24, 2025

Tailwinds Mount for IDOG as Earnings Growth Reaccelerates

• While US stocks have been weighed down by the top-heavy “Magnificent 7” names that are expected to see declining revenue growth in 2025, international developed stocks have quietly outperformed through the first two months of the year. A weaker dollar, tamer inflation growth, easing central banks and stronger expected earnings growth have made international developed stocks more attractive, especially when they currently trade nearly nine turns lower than the S&P 500 on a price-to-earnings (P/E) basis^ – a historically wide valuation gap. Per Bloomberg, US stocks typically set the pace in world markets, having beaten their international counterparts in 24 of the last 35 years. In the six instances that the US has badly lagged global peers by mid-February, as it is currently, the S&P 500 has finished the year roughly 600 basis points (bps) lower (on average) than international markets. With expectations for US Q1 2025 GDP to decline for the first time since 2022 on slowing growth and pull-forward demand in the US on looming tariffs, the shifting tide in global market positioning may be underway.  
  
  
• When investing in international developed markets, searching for consistently positive earnings growth with attractive valuations has historically led to pronounced outperformance. As broad-based indices in international markets tend to be overweight low-quality Financial stocks, the ALPS International Sector Dividend Dogs ETF (IDOG) provides a more thoughtful exposure to international developed investing by equal-weighting the five highest yielding stocks in each sector. IDOG’s deeply discounted valuation tends to close the gap relative to broad-based indices and the US when its earnings growth reaccelerates, as is expected in 2025.

• Per Bloomberg, IDOG exhibits potentially higher expected earnings growth for 2025 relative to broad-based and high-yielding international developed benchmarks.^
  
  
• IDOG’s P/E ratio of 11.16x remains favorable to the P/E ratio of 16.75x on international developed stocks (MSCI EAFE Index) with its overweight to discounted cyclical sectors that may benefit from a reacceleration of earnings growth in international developed markets.^ 
  
  

Source: Bloomberg L.P. and SS&C ALPS Advisors, cumulative performance as of 02/28/2025 and annualized performance as of 12/31/2024 

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 02/28/2025

^ Source: Bloomberg, as of 02/28/2025

Top 10 Holdings

As of 02/28/2025, subject to change

Important Disclosures & Definitions

An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus containing this and other information, call 1-866-759-5679 or visit www.alpsfunds.com. 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.

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.

Dow Jones EPAC Select Dividend Index: aims to represent the performance of high dividend-paying companies in the EPAC (Europe, Pacific, Asia and Canada) region, which covers developed markets excluding the US. 

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&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.

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.

Tailwind: a certain situation or condition that may lead to higher profits, revenue or growth.

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

DOG001469  06/30/2025