The ALPS International Sector Dividend Dogs ETF (IDOG) cut its exposure to Japan while adding positions across multiple European markets in its annual December rebalance, according to data showing a shift in international dividend opportunities.

The rotation reflects how the fund’s yield-ranking methodology drove capital toward less-followed European markets, according to the rebalance data. IDOG selects the five highest-yielding stocks in each sector, meaning Japanese companies fell out of the top yield spots in their respective sectors while European names moved in, according to the fund’s factsheet.

The fund dropped four Japanese companies — Honda Motor Co., Japan Tobacco, Mitsui O.S.K. Lines, and one additional holding — while adding only Nippon Steel, according to the data. This represented a net reduction of three Japanese positions.

Meanwhile, the ETF added exposure to Poland with Bank Polska, Norway with Equinor, Portugal with EDP, and Austria with OMV, according to the data. Denmark also entered the portfolio through AP Moller-Maersk and Coloplast.

IDOG applies the “Dogs of the Dow” approach to international markets by equally weighting its 50 holdings across all 10 sectors, according to the factsheet. The fund rebalances once per year in December, with each sector representing 10% of the portfolio through five stocks per sector.

International Dividend Strategy Targets Southern Europe

The rebalance showed a shift within financials, where the fund sold Northern European banks in favor of Italian institutions. IDOG dropped Nordea Bank in Finland and Credit Agricole in France, while adding Banca Monte dei Paschi and Banco BPM in Italy, along with the Polish bank.

In industrials, the fund swapped German logistics company Deutsche Post for Danish shipping giant AP Moller-Maersk, according to the data. Energy holdings shifted away from Spanish oil company Repsol toward Norwegian energy producer Equinor and Austrian integrated energy company OMV.

The reconstitution included 15 additions and 15 deletions, representing roughly 30% portfolio turnover, according to the data. Sector weights remained equal at 10% each, consistent with the fund’s equal-weight methodology across all sectors.

IDOG launched in June 2013 and charges a 0.50% expense ratio, according to ETF Database. The fund’s strategy starts with the S-Network Developed International Equity 1000 Index as its universe, then isolates the five highest-yielding stocks per sector for inclusion, according to the factsheet.

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