Vanguard International High Dividend Yield ETF

VYMI

Market cap $19.4B

This article provides in-depth coverage of Vanguard's $19B International High Dividend Yield ETF, a well-established and well-diversified fund with a cheap 0.07% ER and an estimated yield approaching 4%. VYMI offers adequate exposure to European, Pacific, Canadian, and Emerging Markets, though is heavily tilted to Financials (42%). Nevertheless, strong dividend growth is likely sustainable, given how my fundamental analysis reveals high sales and EPS growth rates, 15% profit margins, and a 14% portfolio-level ROIC.

VYMI is a simple high-yield international equity index ETF. It currently yields 3.4%, and trades with a massive 45% discount to the S&P 500 on an earnings basis.

There's no such thing as a guaranteed inflation-proof investment. But this Vanguard ETF could be good for a high-inflation environment.

The Fidelity International High Dividend ETF (NYSEARCA:FIDI) has quietly become one of the better performers in international income, returning 29% over the past year and 9% year to date through May 7.

Vanguard International High Dividend Yield ETF earns a buy rating for its sustainable dividends, growth momentum, and attractive valuation versus peers and the U.S. market. VYMI offers superior diversification, a low 0.07% expense ratio, and a 3.47% yield, with dividend growth potential supported by robust fundamentals in top holdings like HSBC, Novartis, and Shell. Key holdings exhibit strong dividend sustainability and growth, with low payout ratios and healthy margins, positioning VYMI for continued capital appreciation and dividend increases.

I have a soft spot for both the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and the Vanguard High Dividend Yield ETF (NYSEMKT: VYM).

By investing in companies that generate durable free cash flow, investors can help dampen volatility, support total return and deliver sustainable income over the long term. Historically, dividends have been a meaningful contributor to equity returns, accounting for nearly 40% of the S&P 500's total return. Dividends can do more than provide a stream of income; investing in companies that generate free cash flow may help reduce volatility, drive total return and deliver sustainable income over the long term.

The Vanguard International High Dividend Yield ETF has delivered a 10.9% annualized return in the past 10 years. The ProShares S&P 500 Dividend Aristocrats ETF has underperformed it and charges a higher expense ratio.

The Vanguard Total International Stock ETF gained nearly 37% in the past year. The Vanguard International High Dividend Yield ETF did even better, with a 37.1% return in the past year.

Vanguard International High Dividend Yield ETF is rated BUY, driven by strong dividend growth and broad international diversification. VYMI offers a 3.59% yield and a five-year dividend growth rate of 10.88%, with an annualized long-term dividend growth near 13%. VYMI's lower concentration in top holdings reduces volatility, while its low 0.07% expense ratio enhances total return potential.