Franklin International Core Dividend Tilt Index ETF (DIVI) Covered Calls

Franklin International Core Dividend Tilt Index ETF tracks the Morningstar Developed Markets ex-North America Dividend Enhanced Select Index. The fund provides exposure to large and mid-cap stocks in developed international markets, excluding the U.S. and Canada. By employing an optimization process, the ETF aims to provide a higher dividend yield than its parent index while maintaining a similar risk profile, offering an efficient core building block for income-focused global portfolios.

You can sell covered calls on Franklin International Core Dividend Tilt Index ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for DIVI (prices last updated Tue 4:16 PM ET):

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Franklin International Core Dividend Tilt Index ETF is a strategic beta investment vehicle designed for investors seeking broad international equity exposure with a persistent "tilt" toward higher dividend-paying companies. The fund offers a sophisticated alternative to traditional market-cap-weighted international indices by systematically favoring stocks with attractive yields without sacrificing diversification.

Core Business and Strategy

The fund utilizes a passive, indexing strategy to track the Morningstar Developed Markets ex-North America Dividend Enhanced Select Index. This benchmark starts with a broad universe of international developed stocks and applies a proprietary optimization model. This model seeks to maximize the portfolio dividend yield while strictly limiting "active risk" or tracking error relative to the broad market. The result is a portfolio that looks very much like the broad international market but consistently delivers a higher distribution rate.

As of 2026, the fund maintains a deep portfolio of over 400 holdings, ensuring that no single company or country overly dominates the returns. Geographically, the fund is heavily weighted toward Japan, the United Kingdom, France, and Switzerland. Sector-wise, it often finds the highest yield opportunities within Financials, Industrials, and Health Care. A key competitive advantage for DIVI is its remarkably low expense ratio of 0.09%, which is significantly lower than many of its dividend-focused international peers.

Competitive Landscape

The international dividend ETF category is crowded with various strategies ranging from "high yield" seekers to "dividend growers." The fund competes by offering a balance between yield enhancement and broad market representation. Key competitors that are publicly traded and feature active options include:

1. Vanguard International High Dividend Yield ETF: A primary competitor that tracks a high-yield index and is one of the largest funds in the category.
2. Schwab International Dividend Equity ETF: A quality-focused dividend fund that applies strict fundamental screens for sustainable payouts.
3. iShares International Select Dividend ETF: A popular fund that focuses on the highest-yielding stocks in developed markets outside the U.S.
4. iShares MSCI EFA ETF: The core unhedged benchmark for developed international markets, often used to measure the fund "dividend tilt."
5. ASML Holding NV: A top holding in the fund and a critical representative of the technology and growth-income components of the European market.

Strategic Outlook and Innovation

In 2026, the strategic outlook for the fund is supported by a global shift toward value and income-generating assets. With interest rate environments stabilizing globally, international dividends have become a crucial component of total return for diversified investors. The fund optimization process is designed to handle this volatility by ensuring the portfolio does not inadvertently lean too heavily into "yield traps"—companies with high yields due to falling stock prices rather than healthy cash flows.

Innovation at the fund level involves the periodic refinement of the Morningstar optimization algorithms to better account for emerging ESG standards and corporate governance shifts in regions like Japan and the Eurozone. By maintaining a disciplined, low-cost approach, Franklin Templeton positions the fund as a "buy and hold" staple for retirement accounts and institutional portfolios. The long-term goal is to continue providing a "core-plus" international solution that serves as both a growth vehicle and a reliable income stream.

Want more examples? DIVB Covered Calls | DIVO Covered Calls