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Vanguard Rolls Out 2 Global ETFs that Focus on Dividend

Dividend investing has been a star lately and is expected to rule the market ahead. Its lure may soften slightly in the U.S. market in case the Fed raises rates at a steady pace. But its popularity among investors in the international market should continue given the rock-bottom interest rates.
Probably, this is why Vanguard recently rolled out two dividend ETFs targeted at international economies. One is based on high yield and the other follows the dividend growth concept. Below we highlight the funds in detail:

Inside Vanguard International High Dividend Yield Index ETF (VYMI)

VYMI represents a compelling product to invest in international markets for high yield. The fund’s underlying index, FTSE All World ex US High Dividend Yield Index, holds 801 stocks in the basket. This large-cap value fund charges 30 bps in fees.

Competition: The newly launched ETF may face competition from iShares International Select Dividend ETF (IDV), SPDR SP International Dividend ETF (DWX), FlexShares International Quality Dividend ETF (IQDF) and iShares International Developed Real Estate ETF (IFGL). Notably, IDV, DWX, IQDF and IFGL yield 5.08%, 5.74%, 4.26% and 3.67%, respectively, and charge 50 bps, 45 bps, 47 bps and 48 bps in fees.
 
Since VYMI charges pretty less than its competitors, it should not face any hurdle in amassing investors’ money. All it has to do is to offer a sizable yield (read: Preferred Stock ETFs for Income-Thirsty Investors).  
 
Inside Vanguard International Dividend Appreciation Index ETF (VIGI)
 
The fund seeks to track the performance of the NASDAQ International Dividend Achievers Select Index which focuses on high-quality companies located in developed and emerging markets, excluding the U.S., that have both the ability and the commitment to grow their dividends over time. The index holds 209 stocks in total. The fund charges 25 bps in fees.
 
Competition: Funds like WisdomTree Global ex-US Quality Dividend Growth ETF (DNL) and International Hedged Dividend Growth Fund (IHDG). Since both charge 58 bps in fees, here also the new Vanguard ETF has every reason to outperform.
 
How Do These Fit in a Portfolio?
 
With the global stock market moving erratically, Chinese economy’s slowdown bothering the world and oil price worries posing occasional threats, safe havens have prevailed this year. This along with low interest rate policies in major central banks have kept bond yields at considerably low levels. In such a scenario, investors may wish to turn to high dividend paying stocks or the related ETFs like VYMI.
 
On the other hand, with global growth worries being the key word lately and the economic situation expected to be edgy in the coming days, a look at the stable dividend aristocrats seems a intriguing idea (read: Why Invest in Dividend Aristocrat ETFs Now?).
 
These dividend aristocrat companies are generally apt for value investing. Since volatility is expected to pull strings ahead, this could be a safer option. In a market crash, these dividend aristocrats normally stand out and even navigate through volatility.  So, VIGI will best suit investors looking for dividend aristocrats in the international arena.
 
Investors should note that Vanguard’s high yield and dividend appreciation ETFs targeted to the U.S. market, namely Vanguard High Dividend Yield ETF (VYM) and Vanguard Dividend Appreciation ETF (VIG), have been quite popular with about $12.5 billion and $19.7 billion in assets. So, the international version of the duo is expected to see the same success ahead.

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VANGD-INT DV AP (VIGI): ETF Research Reports
 
VANGD-INT HI DV (VYMI): ETF Research Reports
 
ISHARS-INTL SD (IDV): ETF Research Reports
 
ISHARS-INTL DVL (IFGL): ETF Research Reports
 
FLEXS-IQD IF (IQDF): ETF Research Reports
 
SPDR-SP INT DIV (DWX): ETF Research Reports
 
WISTR-GL XUS QD (DNL): ETF Research Reports
 
WISTR-INT HDG (IHDG): ETF Research Reports
 
VANGD-HI DV YLD (VYM): ETF Research Reports
 
VANGD-DIV APPRC (VIG): ETF Research Reports
 
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