Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years as the endless speculation over the direction of rates has created market-timing headaches. Investors have endured wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors. One is a more robust selection of high-quality names. Yields also tend to be higher in overseas markets in general. And finally, valuations can be more attractive.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates -- causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates, in order to restore a normal upward slope in the yield curve. And in 2020, global investors, fearing the spread of the coronavirus, have pushed rates lower still. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also many positives in this asset class for U.S. investors.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates -- causing Treasury yields to swoop and dive, resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates, in order to restore a normal upward slope in the yield curve. And in 2020, global investors, fearing the spread of the coronavirus, have pushed rates lower still. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as utilities, REITs and MLPs -- even as generally positive industry fundamentals remained largely intact. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also many positives in this asset class for U.S. investors.