In This Article:
Key Points
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The Vanguard International High Dividend Yield ETF invests in high-paying stocks outside the U.S.
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The portfolio is extremely diverse, and many of the top holdings are familiar to U.S. investors.
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Even near its 52-week high, this ETF is worth a closer look right now.
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10 stocks we like better than Vanguard International High Dividend Yield ETF ›
There are some excellent dividend stock exchange-traded funds (ETFs) in the market, and that's especially true right now. Thanks to the relatively high-interest environment and economic uncertainty, many dividend stocks are trading significantly below their highs.
With that in mind, it might come as a surprise that my favorite high-dividend ETF to buy right now is one that isn't beaten down. In fact, the Vanguard International High Dividend Yield ETF (NASDAQ: VYMI) just reached a new all-time high on the day this was written. But it isn't nearly as "expensive" as you might think and can be a great choice for anyone looking for both dividend income and geographical diversification.
About the Vanguard International High Dividend Yield ETF
The Vanguard International High Dividend Yield ETF is an index fund which, as the name implies, invests in companies based outside of the United States with above-average dividend yields.
In all, the index it tracks consists of about 1,500 stocks, most of which are larger companies (the median market cap is $49.1 billion). About 44% of the portfolio is based in Europe, 26% in the Asia-Pacific region, and 22% from emerging markets, to name the big three contributors.
The fund is weighted, meaning that larger companies make up a larger proportion of the fund's assets. But unlike some of the most popular U.S. index funds, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO), even the largest components make up less than 2% of the assets.
It's also worth noting that even though the fund invests in international companies, that doesn't mean that it's businesses don't operate in the U.S. There's certainly an element of that, but you'll find Nestle, Shell, Novartis, Toyota, and Royal Bank of Canada, just to name a few of the fund's 10 largest holdings.
The dividends paid by these stocks are passed through to shareholders, and because they come from over 1,500 different companies, all of which have different distribution schedules and other factors, the payments can vary from quarter to quarter. However, based on the past four quarterly distributions, the ETF has a yield of about 4.3% as of this writing.