US equities have outperformed the rest of the world for a long time now.  Over the past decade, the US, proxied by the S&P 500 ETF (SPY), has returned 228% compared to a 48% total return for the rest of the world as measured by the MSCI All World Ex. US ETF (ACWX).  On a relative basis, US outperformance has been nearly uninterrupted over this period.

Below is a look at the performance of the US versus the rest of the world since the current bull market for global equities began on 10/12/22.  In this chart, we include the S&P 500 ETF (SPY), another All World Ex. US ETF (CWI), and the Invesco International Dividend Achievers ETF (PID) which holds international stocks with higher dividend yields.

While the US (SPY) is up 58% on a total return basis during the current bull market, the rest of the world (CWI) is up 13.5 percentage points less at +44.5%.  The international dividend stock ETF (PID) is up even less at just 38%.

Looking at the international dividend ETF (PID) over a longer time frame, over the last five years, it’s up 20.6% in price and more than double that on a total return basis.  So dividends re-invested have accounted for more than half of PID’s total return since late 2019.

So which country ETFs available to US investors offer the highest and lowest dividend yields?  Below is a list of as many country-specific stock market ETFs that we could find along with their yield over the past 12 months, their historical average yield, and their year-to-date total return.  The list is sorted from highest 12-month dividend yield to lowest.  (It’s important to understand how ETF dividends and dividends of international equities are taxed based on whether they are qualified or non-qualified.  In non-taxable accounts, investors do not have to worry about the tax rate on dividends received, but in taxable accounts, international dividends are usually considered non-qualified.  You can read more about dividend taxes on ETFs here.)

As shown at the bottom of the table, the average 12-month dividend yield of all country ETFs shown is 3.26%.  That compares to SPY’s 12-month dividend yield of just 1.24%.  Currently, the US ranks near the very bottom of the list when it comes to dividend yields.  There are a good chunk of country ETFs that currently yield more than the 2-year and 10-year Treasury notes.

Like this post?  Join our complimentary Dividend Discovery email newsletter to receive a dividend-centric post in your inbox a couple of times per week.  If you’re interested in dividend stocks and ETFs, this newsletter is for you!  CLICK HERE to sign up with just your email or click on the image below.

Bespoke is running a “Trick or Treat” special for new subscribers between now and Halloween!

Here’s the deal: pay $39.95 now and you’ll receive a month of access to Bespoke Premium plus your choice of ANY t-shirt or sweatshirt at Bespoke Threads.  We’ve just added a number of fun new market-related designs that we think you’ll love.

If you choose to continue with Bespoke Premium past the first month, the subscription renews at $99/month, or you can always change or cancel your subscription at any time.

Simply CLICK HERE or on the image below to sign up with our Trick or Treat special today!  Once you pay, someone from Bespoke will reach out so that you can let us know which t-shirt or sweatshirt you’d like to receive.

Below is a look at everything that’s included with a Bespoke Premium membership:

This morning’s NFIB Small Business Optimism Index showed disappointing results.  The index was expected to show small businesses had less optimism with the index forecasted to fall 0.1 points month over month down to 93.6.  Instead, the decline was much more dramatic as it fell down to 91.2; erasing all of the summer gains. One factor likely at play that we have noted in the past is political sensitivities.

Historically speaking, NFIB data has tended to hold a positive bias during Republican administrations and vice versa. Put differently, optimism rises when Republicans are in power or are expected to be voted in, and optimism falls when Democrats are in power or are expected to win an election. In reaction to last month’s report, we discussed how the recent surge in optimism earlier this summer was concurrent with the rising odds of former President Trump winning back the presidency.  This latest data, on the other hand, would capture that the Presidential race is looking tighter than it did previously, and optimism seems to have moved lower in turn.

Looking under the hood of the report, there wasn’t much to like. Of the inputs to the Optimism Index, only two rose month over month: Plans to Make Capital Outlays and Job Openings as Hard to Fill.  The latter of those is by far the strongest category of the report with the August reading in the 92nd percentile of all months.  Outside of that, there are four inputs to the optimism index and another three non-input categories that now rank in the bottom decile of readings.  Some of those like Actual Earnings Changes and Expectations for Higher Real Sales also fell significantly month over month with bottom decile monthly moves.

As noted above, one of the weaker inputs to optimism was actual earnings changes and other “actual” categories are similarly weak.  In August, that index fell 7 points month over month.  That is the largest decline in a single month since last October when it fell 8 points. More impressively, that drop results in the index falling below the spring 2020 lows for the worst reading since March 2010. Among other categories for observed (rather than expected) conditions, employment change reached a new near term low of -6. That is the weakest reading in this index in two years. As we showed in the Morning Lineup, combined with other labor market categories, the report is consistent with a further weakening labor market.

Circling back on the weak change to earnings, the report details a handful of reasons that small businesses are reporting lower earnings.  As shown below, the most common response in August was increased costs; up 2 percentage points to 16%.  The next most common reason was sales volumes which was unchanged sequentially at 13%.

While those responses would indicate that an uptick in inflation has been hurting the bottom line of small businesses, the report’s inflation gauge was somewhat contradictory. There continues to be more companies reporting that prices are higher versus lower than they were three months ago. However, that higher prices index has been improving dramatically. The index dropped to a new low of 20 in August which is the lowest level since January 2021. While that is also still elevated ranking in the 81st percentile of all months on record, that is well below the peak from two and a half years ago and is consistent with decelerating inflation.  Additionally, the share of businesses reporting inflation as their biggest problem ticked down modestly to 24% from 25% and is well below the highs near 35%.