This ETF tracks the S&P International Dividend Aristocrats Index, which is made up of high-dividend companies in global markets outside the US that have maintained or raised their dividends over long periods. It includes only companies with a record of consecutive dividend payments over a set period, pursuing dividend stability and international diversification at the same time.

It suits medium- to long-term dividend investors who want both dividend income and the diversification benefits of non-US markets.

It is a passively managed (index-tracking) ETF run by First Trust.

The fund adds non-US high-dividend companies that have maintained or increased their dividends over long periods according to the index rules, and holds them at index weights to track the performance of that index. By requiring dividend continuity, it screens out one-off high-dividend stocks and emphasizes the sustainability of payouts.

• International diversification focused on non-US markets
• Stock selection based on a long dividend track record requirement

Assets under management (AUM) stand at $168.9M, and the expense ratio is 0.60% per year.

Compared with similar international high-dividend and international equity ETFs, there are differences in fee levels and dividend characteristics, so a side-by-side review is worthwhile.

The fund moves in line with overseas dividend stocks overall, and volatility tends to appear depending on exchange rates and the global interest rate environment. Given the nature of dividend stocks, their relative appeal versus bonds can shift with the direction of interest rates.

Fund flows are influenced by demand to diversify away from heavy US exposure and by interest in overseas dividend income. Shifts in dollar strength and global risk appetite also affect supply and demand for overseas assets.

Its strengths are international diversification and dividend income built on a long dividend track record, while its drawbacks are currency exposure and a relatively high expense ratio.

VYMI, shown in the table, is a lower-cost, direct substitute that invests broadly in non-US high-dividend stocks, while VIGI is an ETF focused on overseas dividend growth. DFAI, DFIC, and DFAX are actively managed ETFs that diversify across overseas core equities, placing more weight on overall market exposure than on dividends. IGRO is also worth considering as a dividend growth variant.

Here are the points to review before investing in FID. Because it is an overseas dividend ETF, it is advisable to check in advance the currency exposure, fee burden, the dividend characteristics of its holdings, and its country composition.

Exchange rate moves and overseas market volatility are the main drivers of short-term performance. Given the nature of dividend stocks, the fund may be relatively weak when interest rates rise, so it is necessary to monitor the rate environment as well.

It is a suitable choice for investors who want both dividend income and diversification in non-US markets. If fees matter more to you, compare VYMI, and if you place more weight on dividend growth, it is recommended to compare VIGI as well.