Savvy dividend investors know the utility of adding some international holdings to their income portfolios, whether by way of individual stocks or exchange traded funds (ETFs).
The explanation is straight forward: 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.
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.
One of the more compelling options among international dividend ETFs is also one of the newest: The Vanguard International Dividend Appreciation ETF (NasdaqGM: VIGI), which debuted in early March.
VIGI is the international answer to the popular Vanguard Dividend Appreciation ETF (NYSEArca: VIG), the largest U.S. dividend ETF.