Vanguard International High Dividend Yield ETF

VYMI

Market cap $12.3B

If you are looking for a source of income that outlives you, look into dividend ETFs that are time-tested over decades.

This current market backdrop is one that's kind of hard to parse out, in terms of which direction stocks are headed from here.

The market keeps grinding higher with growth stocks leading the way. This has led to even the vaunted S&P 500 becoming very heavily concentrated at the top with megacap tech stocks.

When the market is at all-time highs, as it is today, investors often freeze up. During these periods, there tends to be chatter about high stock prices, so people worry that they'll end up buying right before a big pullback.

International equities have outperformed YTD but continue trading at discounted prices and valuations. Yields are generally quite good, if not outstanding. Lots of international equity ETFs out there. I'll be giving a quick rundown of four such ETFs in this article.

The Vanguard High Dividend Yield Index Fund ETF and the Vanguard International High Dividend Yield Index Fund ETF offer appeal to investors moving away from money market funds. VYM focuses on U.S. companies, with its allocation tilted toward defensive/secular growth sectors. VYMI invests in international stocks, principally in Europe, the Pacific, and Emerging Markets, with an allocation heavily overweight in the financial sector.

Why not have your money make you money starting today with dividend-paying ETFs? Not only do these ETFs offer a good deal of diversification, but they can also help lower your overall risk compared to investing in an average security.

Dividend-focused investors face challenges due to lower payout ratios and a crowded ETF market, making fund selection crucial for reliable income. VYMI boasts a 3.97% dividend yield with strong diversification across geographies and equity holdings. I recommend a diversified strategy using Vanguard's VYMI for international exposure and Schwab's SCHD for U.S. dividend growth, both offering strong yields and low fees.

Foreign dividend stocks just delivered the kind of returns that growth investors dream about. The Vanguard International High Dividend Yield ETF (VYMI 0.56%) has returned 26.6% year-to-date, more than doubling the S&P 500's 10.8% gain.

Building a reliable dividend income stream doesn't require thousands of dollars or complicated stock picking strategies. In fact, $200 is all it takes to scoop up shares of two high-yield dividend ETFs that offer compelling opportunities right now.