The Vanguard International High Dividend Yield ETF (VYMI) is a popular way to gain exposure to global dividend-paying stocks. And it adheres closely to the Vanguard playbook of low costs and broad diversification.
This dividend exchange-traded fund (ETF) has built a strong reputation since its launch in 2016. It boasts billions in assets under management and a long enough track record for investors to evaluate its performance across different market cycles.
In this article, we'll cover how this Vanguard ETF works, what it holds, how to buy the ETF, and whether it makes sense for your portfolio as a dividend investor.
What is the Vanguard International High Dividend Yield ETF (VYMI)?
This ETF is a passive fund that tracks the FTSE All-World ex U.S. High Dividend Yield Index. That means it doesn't try to beat the market. It simply aims to replicate the index's holdings and performance as closely as possible.
The index starts with a universe of non-U.S. international stocks and selects the top 50% based on forecasted 12-month dividend yield, excluding real estate investment trusts (REITs). Once selected, the stocks are market-cap weighted, meaning larger companies have more influence on the portfolio than smaller ones.
Exchange-Traded Fund (ETF)
How to buy the Vanguard International High Dividend Yield ETF (VYMI)
- Open your brokerage account: Log in to your brokerage account where you handle your investments. If you don't have one yet, take a look at our favorite brokers and trading platforms to find the right one for you.
- Search for the ETF: Enter the ticker "VYMI" into the search bar to bring up the ETF's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Holdings of the Vanguard International High Dividend Yield ETF (VYMI)
This ETF is one of the most diversified dividend funds available, with over 1,500 companies in the portfolio. It leans toward large-cap stocks, with a median market cap of $49 billion, and maintains a value tilt, as indicated by a price-to-earnings (P/E) ratio of 11.7 times and a price-to-book ratio of 1.4 times.
Despite that value focus, it also prioritizes quality, with an average return on equity of 11.8% and earnings growth rate of 13.1%. The largest sector weighting is in the financials sector, followed by industrials and consumer staples. Country exposure is led by Japan and the U.K., with notable weight in Switzerland, Canada, Australia, and China.
Top companies in the portfolio include:
- Nestle (OTC:NSRG.F)
- Roche Holding (RHHBY +2.94%)
- Shell (SHEL -3.75%)
- Novartis (NVS +1.67%)
- Toyota Motor (TM +2.34%)
- HSBC Holdings (HSBC +2.02%)
- Commonwealth Bank of Australia (OTC:CMWA.Y)
- Royal Bank of Canada (RY +1.51%)
- Mitsubishi UFJ Financial Group (OTC:MTSU.Y)
- Allianz (OTC:ALIZ.Y)
Should you invest in the Vanguard International High Dividend Yield ETF (VYMI)?
If you've determined your portfolio needs international diversification and you want that exposure to come with a dividend focus, this ETF is worth a serious look. It's ideal if your priority is maximum breadth with minimal constraints on country or sector. That makes it a one-stop solution for spreading out your risk globally while targeting income.
However, if you're looking for something more specific, such as just large caps or exposure to particular countries or sectors, this ETF might feel a bit too broad. But for a well-rounded, globally diversified dividend option, it does exactly what it's designed to do and at a low cost, too.
Does the Vanguard International High Dividend Yield ETF (VYMI) pay a dividend?
Yes, this ETF currently pays a 4.32% trailing-12-month dividend yield. Distributions are made quarterly, typically in March, June, September, and December.
What is the expense ratio for the Vanguard International High Dividend Yield ETF (VYMI)?
This ETF has an expense ratio of 0.17%, which means you'll pay $17 per year for every $10,000 invested. This fee isn't charged directly. It's deducted from the fund's performance, so it quietly reduces your returns behind the scenes.
Expense Ratio
While this cost is affordable by most standards, it's not the lowest in its category, especially compared to some ultra-low-cost international ETFs. Still, the fee is reasonable given the fund's broad diversification and income-focused strategy.
Historical performance of Vanguard International High Dividend Yield ETF (VYMI)
Metric | 1-year | 3-year | 5-year |
|---|---|---|---|
Market price | 16.99% | 11.12% | 14.51% |
Net asset value | 17.11% | 11.16% | 14.44% |
The bottom line
This ETF offers a simple, effective way to add global income exposure to your portfolio. It combines broad diversification, a competitive yield, and Vanguard's trademark low-cost structure, making it a reliable option for long-term investors looking to go beyond U.S. borders.
While it may be too broad for those seeking targeted exposure to specific countries or sectors, it excels as a core holding for anyone wanting international dividend stocks in one convenient package.
