According to YCharts the Franklin International Dividend Booster Index ETF (XIDV) has returned 8.95% year-to-date, narrowly outperforming the iShares Core MSCI EAFE ETF (IEFA), which is up 8.75% over the same period.

At first glance, the difference may appear modest. But in a year defined by global sector rotation and renewed demand for income, that slight edge reflects a meaningful structural distinction. While IEFA offers broad, market-cap-weighted exposure to developed ex-U.S. equities, XIDV’s rules-based dividend optimization framework has allowed it to capture upside while leaning into higher-yielding, lower-volatility segments of the market.

With international equities rebounding and value-oriented sectors attracting fresh inflows, even small performance gaps can signal where investor preferences are shifting.

The Booster Strategy: Yield With Guardrails

According to Roxanna Islam, head of sector industry and research at VettaFi, XIDV is designed to provide a dividend yield two to three times that of its parent index. Importantly, it does so without leverage or derivatives.

The ETF tracks the VettaFi New Frontier International Dividend Select Index, which employs a three-stage optimization process. Thousands of simulations are run across global equity universes to maximize dividend yield, control volatility and limit concentration risk.

The result is a smart beta profile that tilts toward quality income rather than simply the largest companies in the benchmark.

Sector Positioning Driving Relative Strength

XIDV’s slight but notable outperformance is largely a story of sector allocation.

The ETF has near-zero exposure to technology (~0.14%), a sharp contrast to IEFA’s more meaningful tech weight. Instead, the portfolio leans into European utilities, UK insurers and asset managers, Nordic banks and energy and industrial names. These sectors combine steady cash flows with attractive dividend policies — traits that have resonated amid the rotation toward value and income.

European Income Leaders at the Core

As of mid-February, the ETF’s top holdings underscore its clear tilt toward quality income.

• Engie SA (2.70%) – A European utility benefiting from energy transition tailwinds while maintaining a stable dividend profile.
• Carrefour SA (2.61%) – A consumer defensive anchor providing low-volatility characteristics.
• M&G plc (2.28%), Phoenix Group Holdings plc (2.24%), and Legal & General Group plc (2.19%) – UK financial heavyweights known for sizable dividend payouts and improving sentiment toward British equities.
• Danske Bank A/S (2.15%) and Svenska Handelsbanken AB (1.99%) – High-quality Nordic lenders reinforcing the fund’s quality-value tilt.
• Additional exposure to diversified industrials and energy — including Bouygues SA, Ayvens SA, and OMV AG — adds cyclical balance.

Yield Advantage and Geographic Differentiation

Beyond performance, income remains a core differentiator. XIDV, which manages roughly $62 million in assets and charges an expense ratio of 0.19%, currently offers a dividend yield around 6.7%, nearly double IEFA’s typical ~3.5% yield. For allocators prioritizing income without stepping into leverage, that spread has been compelling.

There’s also a geographic nuance. Unlike IEFA, which excludes Canada under its EAFE construction, XIDV includes roughly 7% Canadian exposure. Strength in Canadian financials and energy names — including companies such as TELUS Corporation and Whitecap Resources Inc. — has provided an additional tailwind.

XIDV’s lead year-to-date may seem modest, but it underscores how portfolio construction matters in the current environment. By systematically emphasizing high dividend yield while maintaining volatility discipline, the ETF has carved out a distinct position within the international equity landscape.

In a market increasingly rewarding income and balance-sheet strength, that structural edge could continue to matter.

For more news, information, and strategy, visit ETF Trends.

VettaFi LLC (“VettaFi”) is the index provider for TOV, XUDV, XIDV, and ELFY, for which it receives an index licensing fee. However, TOV, XUDV, XIDV, and ELFY are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of TOV, XUDV, XIDV, and ELFY.