2 Vanguard ETFs That Have Crushed the Market This Year

David Jagielski, The Motley Fool

Fri, Apr 25, 2025, 2:57 AM 4 min read

The S&P 500 was trading at elevated levels prior to this sell-off, and it has been highly vulnerable to how tech stocks perform, given how significant their positions are in the index. Nvidia, for example, is down 28% this year. While it has helped the index achieve tremendous returns in recent years, it's among the stocks dragging it down right now.

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So where should investors look for safety these days? A couple of top-performing Vanguard funds may offer some attractive options. Both the Vanguard FTSE Europe ETF (NYSEMKT: VGK) and the Vanguard International High Dividend Yield Index Fund ETF (NASDAQ: VYMI) are in positive territory thus far this year, and are easily outperforming the market.

Here's a closer look at these exchange-traded funds (ETFs) to see whether they might be good investments to add to your portfolio today.

Vanguard FTSE Europe ETF

This Vanguard ETF gives investors exposure to top stocks in Europe, which can be valuable at a time when the U.S. is involved in trade wars with multiple countries. European businesses likely won't come out of that unscathed, but they may offer investors a way to at least diversify and be less dependent on the U.S. economy.

There are more than 1,200 stocks in this Vanguard fund, including highly recognizable names such as SAP, Nestle, and ASML Holdings -- the top three holdings in the fund. However, no stock accounts for more than 2% of the ETF's overall weight, which ensures that there isn't too much dependence on how a single company performs.

Other attractive features of the ETF include its low expense ratio of 0.06% and its relatively high dividend yield of 3.2%, which is more than double the S&P 500 average of 1.5%.

The Vanguard FTSE Europe ETF has been doing well this year, and given the diversification it can provide your portfolio with, it may be a good investment to hang on to, not only for this year but over the long haul.

International High Dividend Yield Index Fund ETF

Investors can seek out even more diversification with this Vanguard fund, which focuses on stocks all around the world -- with the exception of the U.S.

Europe accounts for the bulk of the fund's holdings at 44%, followed by the Pacific region at 26% and emerging markets at 22%. It has more than 1,500 stocks in its portfolio, and within this ETF, the largest holding (Nestle) accounts for just 1.8% of its total weight. Other names among its top three include Roche and Shell.

Due to its exposure to emerging markets, this Vanguard fund may be the riskier choice of the two on this list. But if your goal is international diversification outside the U.S. market, then it may still make for a suitable investment worth hanging on to.

The fund does have a higher expense ratio of 0.17%, but its higher yield of 4.5% can more than make up for that. One of the fund's key features is that it seeks out stocks that it expects will generate above-average yields. For dividend investors looking for safety and recurring income, that can make this a great ETF to buy and hold for the long haul.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and Nvidia. The Motley Fool recommends Nestlé and Roche Holding AG. The Motley Fool has a disclosure policy.

2 Vanguard ETFs That Have Crushed the Market This Year was originally published by The Motley Fool

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