Dividends4Life

In a recent Morningstar interview, Gerd Woort-Menker, longtime manager of JPMorgan International Value (JIESX), observed that there has not been the same rush into foreign dividend-payers. "Compare Royal Dutch Shell (RDS.A) to Exxon Mobil (XOM)," Woort-Menker noted. Both global integrated oil-and-gas companies are reliable dividend stalwarts, but Morningstar currently calculates a projected yield of 4.8% for Royal Dutch Shell, as opposed to 2.9% for U.S.-based Exxon Mobil.

Now may be the time for dividend-oriented fund investors to look to the horizon. Those doing so in taxable accounts should be aware of two quirks detailed in this ETF Specialist. First, many countries require taxes to be withheld before dividends are distributed, and U.S. investors can claim a deduction or credit for those foreign taxes paid. Second, thanks to tax treaties, many foreign dividends are taxed at the qualified dividend rate currently in effect until the end of 2012, but others are treated as ordinary income.

Source: Morningstar

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