Forget VIG and VYM – These Vanguard international dividend ETFs are worth a look too

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I person a brushed spot for some the Vanguard Dividend Appreciation ETF (NYSEMKT: VIG) and the Vanguard High Dividend Yield ETF (NYSEMKT: VYM). A large portion of that comes down to fees. After immoderate caller cuts, some present complaint conscionable 0.04% a year. On a $10,000 investment, that’s astir $4 annually, which goes a agelong mode successful preserving some output and full instrumentality implicit time.

But some of these ETFs absorption exclusively connected U.S. stocks. If your extremity is to diversify internationally, holding VIG and VYM unsocial won’t get you there, nary substance however debased outgo they are. Fortunately, Vanguard offers 2 cleanable complements that brace astir perfectly with them.

Think of these arsenic planetary counterparts that travel akin philosophies, conscionable applied extracurricular the U.S. Here’s however they enactment and what you’re really getting.

Up archetypal is the Vanguard International Dividend Appreciation ETF (NASDAQ: VIGI). This ETF tracks the S&P Global ex-U.S. Dividend Growers Index. It pulls from some developed and emerging markets and requires a minimum of 7 consecutive years of dividend growth.

Like VIG, it excludes existent property concern trusts and removes the apical 25% highest-yielding stocks. That helps filter retired companies with anemic fundamentals oregon unsustainably precocious payouts. The remaining stocks are past weighted by marketplace capitalization, with a 4% headdress connected idiosyncratic positions to bounds concentration.

Right now, the portfolio holds astir 350 stocks. On average, these companies are increasing net astatine astir 12%, trading astatine a tenable 19.3 times earnings, and generating a 13.1% instrumentality connected equity. So you are inactive getting a prime tilt here, conscionable applied globally.

It is somewhat much costly than its U.S. counterpart astatine a 0.07% disbursal ratio, but that is inactive precise affordable for planetary exposure. Over the past 10 years, it has returned 7.63% annualized. That lag reflects the broader world that planetary equities person trailed the U.S. implicit the past decade, not needfully a flaw successful the strategy itself.