Rising rates can certainly give fixed income investors headaches, especially when they’re already having to deal with historically low yields at the same time. One place to look for more income is overseas with international opportunities.
Furthermore, dividends are also an option other than relying on bond income. Global equities rebounding from the economic effects of the pandemic mean that more companies are cranking up their dividend yields or re-starting them if they were halted.
International dividends, in particular, were strong performers compared to those in the U.S.
“Dividends paid by U.S. companies increased by 3.5% in 2021, a solid improvement from the previous year but one that lags behind the increases seen in many other regions,” a Barron’s article notes. “Global dividends totaled $1.47 trillion last year, up nearly 17% from 2020 levels.”
An International Dividend ETF Investors Can Appreciate
Furthermore, it’s necessary to not simply offer the highest dividend yield, but to allow for growth in the future. That said, investors will literally appreciate the Vanguard International Dividend Appreciation Index Fund ETF Shares (VIGI).
VIGI seeks to track the performance of the Nasdaq International Dividend Achievers Select Index, which measures the investment return of non-U.S. companies that have a history of increasing dividends. The index focuses on high-quality companies located in developed and emerging markets, excluding the U.S., that have both the ability and the commitment to grow their dividends over time.
Furthermore, the manager attempts to replicate the target index by investing all, or substantially all, of its assets in the broadly diversified collection of securities that make up the index, holding each stock in approximately the same proportion as its weighting in the index.
Overall, VIGI:
- Seeks to track the performance of the NASDAQ International Dividend Achievers Select Index.
- Provides a convenient way to get exposure across developed and emerging non-U.S. equity securities around the world that have a history of increasing dividends.
- Employs a passively managed, full-replication strategy.
- Has a low expense ratio of 0.15%.
For more news, information, and strategy, visit the Fixed Income Channel.