A New Idea Among International Dividend ETFs

Dividend investors should limit their search for income and yield to U.S. stocks and exchange traded funds. Savvy dividend investors know ex-U.S. developed market dividend payers often feature larger yields than their U.S. counterparts, an assertion proven by comparing large- and mega-cap dividend stocks from familiar dividend sectors such as consumer staples, energy, financial services and telecommunications.

While there are plenty of well-established international dividend ETFs, the Vanguard International High Dividend Yield ETF (NasdaqGM: VYMI), which debuted earlier this year, is another viable option to consider. An easy way of looking at the Vanguard International High Dividend Yield ETF is that it is the international answer to the wildly popular Vanguard High Dividend Yield ETF (NYSEArca: VYM), one of the largest U.S. dividend ETFs.

Related: Low U.S. Interest Rates Boost International Dividend ETFs

VYMI tracks the performance of the FTSE All-World ex US High Dividend Yield Index, which is composed of over 800 of the highest yielding large- and mid-cap developed and emerging market securities. The ETF follows “an income investing strategy, focusing on companies with high dividend yields,” according to Vanguard.

Low interest rates in the U.S. have sent investors flocking to dividend stocks and exchange traded funds in recent years. With central banks throughout the developed world paring rates and engaging in monetary easing, government bond yields are falling, giving investors good reason to consider international dividend ETFs.


“As of June 22, 2016, this fund has posted a total return of 8.44%, with a current dividend yield of 4.53%, which are impressive numbers for a fund that is so new. It closely follows its benchmark index in terms of regional exposure, with 56% of the fund holding European dividend-paying stocks, 20.6% in the Pacific, 7% in North America and 16.3% in emerging markets. In terms of sectors 36.7% of the fund’s holdings are in financial companies, 12.4% in consumer goods, 9% each is in industrials and oil and gas and the rest is divided between healthcare, telecommunications, utilities, technology and other sectors. So far, this fund has accumulated $43 million in assets under management,” according to Investopedia.