The Vanguard International High Dividend Yield ETF invests in high-paying stocks outside the U.S. The portfolio is extremely diverse, with many of the top holdings familiar to U.S. investors. About 44% of the portfolio is based in Europe, 26% in the Asia-Pacific region, and 22% from emerging markets. The fund is weighted, meaning larger companies make up a larger proportion of the fund’s assets.
Even the largest components make up less than 2% of the assets. Some of the fund’s largest holdings include the Royal Bank of Canada. The dividends paid by these stocks are passed through to shareholders.
Based on the past four quarterly distributions, the ETF has a yield of about 4.3% as of this writing. It’s worth noting that the ETF is trading just below its 52-week high. But that doesn’t mean it’s expensive.
High yield and diversification benefits
The average price-to-earnings ratio of the stocks in the ETF is just 11.7 despite a weighted-average earnings growth rate of more than 13% from the stocks in the portfolio. The average stock in the portfolio trades for just 1.4 times book value.
Of course, there are some risks. Many of the companies in the portfolio could potentially be impacted by tariffs and uncertain political climates in certain regions. There are also foreign exchange risks and other factors that do not apply as much to purely U.S. companies.
For my money, the Vanguard International High Dividend Yield ETF looks extremely attractive right now from a risk-reward perspective. I added it to my portfolio earlier this year and plan to continue to add to my position throughout 2025. The ETF offers an excellent combination of high yield and geographical diversification.
While there are always risks associated with investing, the current metrics make this ETF a compelling choice for those seeking dividend income and international exposure.