Worried About Inflation? This International ETF Could Help Protect Your Portfolio

Inflation is creeping up again. In April, the Consumer Price Index roseate 3.8%, up from 3.3% successful March and 2.4% successful February and January. Bond yields are going higher. The U.S. 10-year Treasury output has climbed by astir 40 ground points twelvemonth to date. Bond investors look to beryllium getting tense astir the chances of higher ostentation and much authorities borrowing.

If the system goes done a play of "higher for longer" inflation, that volition beryllium achy for consumers, and it could bring losses to investors. Should you alteration your concern strategy to header with higher inflation?

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How to put for higher ostentation

There are nary guarantees that immoderate benignant of concern volition execute good during inflation. But 1 wide mode to put for a higher-inflation situation is to bargain dividend stocks. These companies thin to person beardown equilibrium sheets, dependable profitability, and pricing powerfulness that enables them to support paying precocious dividends adjacent if ostentation stays high.

Another strategy for precocious ostentation successful America could beryllium to bargain planetary stocks. In lawsuit the U.S. dollar weakens oregon the U.S. system underperforms the remainder of the world, planetary stocks volition go much invaluable successful U.S. dollar terms. That's bully quality for American investors who privation to gain returns successful dollars.

The Vanguard International High Dividend Yield ETF (NASDAQ: VYMI) tin beryllium a bully acceptable for some strategies. During the past six months, it has outperformed the S&P 500 scale and the Vanguard Total International Stock ETF. Let's look astatine however this planetary banal ETF works and whether you should bargain it.

VYMI: 1,582 stocks, 3 years of 21% annualized returns

The Vanguard International High Dividend Yield ETF has performed exceptionally good for investors successful the past fewer years. Its mean yearly full returns (by nett plus value) are 21% for the past 3 years, 13.2% for the past 5 years, and an awesome 35.7% instrumentality successful the past year. Since the fund's inception successful February 2016, it has delivered annualized returns of 11.35%.

The companies owned by this money are reliable dividend payers, mostly from developed economies successful Europe (44.1% of the fund) and the Pacific (23.8%). The apical countries represented successful the money are Japan (11.3% of the fund), the United Kingdom (11.3%), Canada (8.9%), Australia (7.4%), and Switzerland (7.4%).