iShares MSCI World Quality Dividend UCITS ETF (WQDS)

Requesting an ETF that tracks the MSCI World Quality Dividend index, such as the one below

iShares MSCI World Quality Dividend


MSCI details on the Index

I’d like to see this in addition to other MSCI global factor index ETFs so passive investors can control their factor exposure.

Ideally I’d like to see a further breakdown by market (e.g. MSCI USA - Quality Dividend) but I’m not sure if these are well covered by ETFs with KIID. Maybe I’ll request these once the global ones are well covered.

If anyone can find better ETFs for these than iShares please let me know and I’ll support that, I’m aware this is fairly pricey at 0.38%.

As the first discussion point and perhaps to preempt a a few questions:

Dividends as a factor?

Picking a stock based on historic dividends alone has famously been compared to picking based on the colour of the logo or the first letter of the ticker. I agree that picking stocks primarily based on dividends is pretty pointless.

This index also uses quality factors to try and avoid unsustainable dividends which is why I think it has some merit.

What about the other high dividend ETFs, do we need another?

I believe these often use more basic metrics (i.e. just looking at dividend yield / history alone) and thus are at risk of including stocks with excessively large or unsustainable dividends.

Why would anyone pick this over MSCI World?

I’d consider owning this to re-balance factor exposure. For example if I pick some growth stocks (e.g. Alphabet) I might also want to pick up some high yield index to keep my factor exposure neutral relative to MSCI World

Others might want to build up different factor exposures using this in combination with MSCI’s 5 other factor indices.

Perhaps I’m mistaken, but in the opening sentence did you mean an ETF that tracks the MSCI World High Dividend Yield Index rather than value?

Thanks, fixed

I’m supporting the add, it’d be great to have this up!

I agree on the dividends, it’s pretty meaningless, but it has a feel-good effect, not to be underestimated.

If you buy Alphabet, you are not really getting factor exposure until you have also bought a significant portion of the other growth stocks, otherwise you have single stock risk, not growth factor risk. If you want to keep neutral with MSCI world, wouldn’t it be better just to buy MSCI world as the cost would be lower? Having 50/50 growth and value would be the same as the index.

At the same time, going all in on any one factor is…brave.

Fair points, having considered it further I think it’s fairly unlikely I’ll actually buy this, but I think it makes sense to have all of the MSCI factor index ETFs so people have the freedom to choose, it’s weird not to have the whole set.

Regarding balancing single stock picks I think it does make some sense, Alphabet shares the same characteristics as other growth stocks so will be subject to similar beta. In the same way as buying Alphabet increases your exposure to US macroeconomics, which may or may not be desirable.

I don’t want to be 100% neutral to MSCI world, otherwise I’d just get that as you say, I just want a bit more control to manage extra exposures, for example I currently have ~15% Value and ~15% Low Cap to overweight those and that’s probably it for me.

I’d really like Quality to be added as I think this is what a lot of people are really seeking when they are picking Dividend strategies if they aren’t aware of Dividend Irrelevance