ETF Battles: IDVO vs. LVHI vs. SCHY - An International Affair!

Well, if your portfolio only speaks English, it's missing the global conversation. Mindes amigos. From emerging markets to established powerhouse economies, international stocks offer diversification and serious growth potential. Today's audience requested ETF matchup is a triple header. It's a duel between international ETFs from Amplify, Franklin Templeton, and Charles Schwab.

I should say dividend international ETFs. Stick around to find out which one might be the best choice. This is ETF Battles and I'm Ronda Ley and a warm welcome to all. Hit the like button if you've been enjoying our program and join our community by subscribing. We're almost at 60,000 subscribers. So, be sure to tell your 10 million friends and have them join us. It's always going to be a good time here on ETFU TV.

Of course, if you've got an ETF contest that you need help with, two ETFs that you'd like to see that you're thinking about maybe buying or investing in and you need some help analyzing them, send us those ticker symbols in the comment section below. We'll help you look at that and put it on perhaps a future episode of ETF Battles. You can also send that to me on our X feed at ETF guide.

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Today's ETF battle was suggested to us by a viewer named Brian. And Brian wanted us to look at what he called promising international ETFs for diversification. Thank you, Brian. This is an excellent matchup request. And it's a triple header between International Focused Funds from Amplify, Franklin Templeton, and Charles Schwab. Judging today's contest, we have got the best in the business, Mike Akens at ETF Action, and David Durkin, an independent ETF analyst. Great to see both of you guys and welcome back.

Thanks, Ron. It's great to be here. Yeah, thanks. Good to see you again. Our four battle categories are cost, exposure, strategy, performance, and then we've got our mystery category where our judges can pick a factor or thing that they feel is crucial to today's contest. Our judges can also nominate wildcard ETFs. We may get a few of those on today's program. So, we'll just have to wait and see. I got the scorekeeping duties at the end of the program. We will declare an overall winner. And remember that none of the battle outcomes are ever predetermined or known in advance by our judges or myself.

So the first category is cost. We're going to start with you Dave. Get us started. Yeah, this category is pretty clearcut. SCY comes in at eight basis points. You know a lot of the Schwab ETFs are cost leaders in all the categories they're in. And this is no exception. LVHI is at 40 basis points. IDVO is at 66 basis points. SCY is the clear winner here.

Mike, you're up next. How do you see it in terms of cost? I mean, Schwab is like the little sister Vanguard when it comes to competing on fees. So, it's pretty obvious. I would also note that both SCHY and LVHI have a liquidity advantage over IDVO. But, as we will explore as we go along in the debate, sometimes there's more to be known than just cost itself. That takes us next to exposure strategy. And Mike, you're still up. So, what do these funds do and how do they compare?

All right. So, let's We really have a good matchup here today. We have three very unique strategies. Very different. They're going to get you exposure to that international marketplace. They're going to do it in very unique ways, right? First, I would call this a dividend matchup. You have two traditional divid strategies dividend strategies that are focused on dividend paying companies that being SCHY LVHI and then you have a non-traditional strategy that's going to create income through writing covered calls and it's actively managed.

So let's start there. I would think call this kind of that non-traditional actively managed income generator for international stocks. First on the actively managed side they are very active. If you look over history, the team that is managing this portfolio for Amplify is really making bets and making changes over time, right? You know, look back a few years ago, energy was the largest allocation in the portfolio. Today, it's much smaller, you know, with much larger allocations to information technology, much more growth tilt to the portfolio.

So, they're actively picking the stocks that they believe are going to outperform in the current environment. But it's also important to note that they're doing it, they're limiting themselves to doing it with ADRs. So, they're getting that exposure by only investing in USlisted ADRs. So, full exposure to the local company, but they're doing it through an ADR. It's a as you'll see when we talk about it, it's going to have it's got a more of a growth tilt right now. That's not historically true, but it does right now within the portfolio.

And then you kind of switch over to SCHY and LVHI. I would call CHI a core dividend portfolio, right? It's very diversified. It's 100 stocks. They're looking for dividend payers, but also applying a lot of stringent quality screens. So, kind of a fundamentally developed portfolio. It's going to have a value tilt just like LVHI. It will consistently have that value tilt, but you know, it's going to get you a good broad-based diversification, lowcost exposure to the marketplace.

And then there's LVHI. I would call it your defensive dividend income. Right now, it's going to take that dividend approach, but then it's also going to overlay the concept of low volatility, right? Low volatility dividend payers and and in doing so, it creates a much different profile than the other two portfolios. It gets a much higher allocation to defensive sectors like utilities, which have historically lower volatility. So, you know, your up- down captures on an LVHI are going to be much lower because you're going to have a much more defensive portfolio.

So very unique strategies. Where does that bring me? There I would say you really they're all three very good fundamentally built portfolios. I tend to like the ability with international investing to be able to change with the environment. If you kind of look at IDVO, that active management, you can see where they've changed exposures from Europe to Asia back to Europe, where they've changed from energy to information technology and back around. I do think there's an opportunity set there. They're going to capture that income for you.

So, you know, you have to note that they're going to put a little cap on their upside of their stock calling by riding those covered calls. But as we'll get into in the next section, they've done extremely well. That's my winner for this category, but that's my personal preference. It really depends on what you're trying to build. I think you can't go wrong with any of these strategies. They're all unique in their own aspect, which makes this battle very fun.

Dave, you're up next. How do you see it when it comes to exposure strategy? Yeah, I agree with Mike's take on this and that each of these funds really has a fairly robust multiffactor strategy that, you know, takes a look at yield, it takes a look at dividend history, it takes a look at quality. So, you're really getting a pretty well-developed, well-rounded, high quality portfolio that's really ideal if you're going to invest in international stocks for dividend income. Mike kind of ran down the whole strategy with IDVO. You know, even that one looks at, you know, dividend growth and earnings growth.

You don't see that in a lot of covered call strategies. A lot of them will just overwrite an index and call it a day. But like Mike said, this one's actively managed, has some screens in there. It's trying to be very opportunistic. So, in that sense, I think IDVO is really good among covered call strategies. I tend to kind of take the opposite stance. I like the more traditional dividend equity products. And between SCHY and LVHI, I think it's really close.

I'd probably give just the slightest of advantages to SCHY here. You know both of these both of these funds look at sustainable earnings and cash flows and debt levels and roe and it gives some consideration to high yield and you know SCHY even has a low volatility tilt to it even though it's not specifically you know explicitly stated like LVHI is. So I think they're both very good strategies. I kind of prefer SEY just a little bit because it takes in takes into account that dividend growth history and dividend growth rate a little more than LVHI does.

I think it just makes a little more well-rounded. So, again, I agree all these funds are are great at what they do. I'm just going to give the slight advantage to SCHY in my opinion. Very good. Now, that shifts us to the next category which is performance and yield. And both of those things have been combined into one category. So Dave, break it down for us. How do these funds compare?

Yeah, Mike kind of alluded to it already, but IDVO is the winner in this category. It's over the short and since the since inception or since common inception, I should say, IDVO has outperformed both LVHI and SCHY.