Funds for Foreign Dividend-Growth Stocks

Get extra yield from foreign firms that pay more and more dividends

A dividend-growth strategy works even better overseas than it does in the U.S. That’s because foreign dividend-paying stocks generally yield more and are less volatile than their domestic counterparts. They also tend to lose less in down markets, yet still manage to outpace the broader international stock market over time.

According to a Fidelity study that tracked performance from 2002 through 2011, foreign stocks typically yielded 4% to 5%, while U.S. stocks paid about 2%. Over the same period, shares of foreign companies with a history of raising their dividends returned 6% annualized, while U.S. companies that regularly raised dividends gained just 4% a year, on average.

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Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.