Like a comprehensive index at any time S&P 500 Growing 18% in just one year, this is considered a good stretch. That’s been the case for the S&P 500 since the beginning of 2025, rebounding after a volatile year.
While the S&P 500’s performance has been a good sign for U.S. stocks, there is one Vanguard ETF brewing overseas that has far outperformed the market. The Vanguard International High Dividend Yield ETF (NASDAQ: VYMI) 41% increase since the beginning of 2025 (as of January 30).
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As the name suggests, VYMI focuses on international companies that pay above-average dividends. To be incorporated, a company must meet yield criteria and demonstrate that it can maintain its dividend. VYMI currently covers over 1,500 stocks, divided into sectors as follows:
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Europe: 44%
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Pacific: 25.9%
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Emerging Markets: 20.9%
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North America: 8.2%
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Middle East: 0.8%
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Other: 0.2%
Incorporating companies from both developed and emerging markets gives investors the best of both worlds. You get the (relative) stability of companies in developed markets and the high growth opportunities that come with investing in companies from emerging markets.
And because these companies pay dividends, they are more likely to be financially stable and firm in their industries. For perspective, here are its top five holdings Roche, HSBC, Novartis, Nestléand Royal Bank of Canada. These are well-established companies with a history of being shareholder-friendly.
VYMI’s current dividend yield is around 3.4%, but it has averaged a yield of around 4.1% since early 2025. Both are more than three times the S&P 500. The yield will fluctuate with VYMI’s stock price, but if we assume it will maintain its average of $0 ($1-0). The investment will pay $40 annually.
Investing in an international ETF is a great way to develop a truly diversified portfolio. Investing in companies across sectors and sizes is important, but investing in companies from different geographic locations is important. I’ll keep the bulk of my investments in US stocks (about 90%) because of the long-term track record, but it’s nice to have international companies that help US stocks hit a speed bump.
In the case of VYMI, if (or, rather, when) VYMI loses momentum, it can still be a good income source for your portfolio.
