Latest news with #VanguardInternationalDividendAppreciationETF
Globe and Mail
19-03-2025
- Business
- Globe and Mail
The Best Vanguard ETF to Invest $1,000 in Right Now
What to invest in now -- that may seem like a tough decision, given the current economic uncertainty in the U.S. including ongoing tariff-related concerns. Investors are worried about inflation, about stock market declines, and even a potential recession. Let's say you have $1,000 to invest right now. The Vanguard International Dividend Appreciation ETF (NASDAQ: VIGI) is a strong option to consider investing in with that amount -- or any other amount. (Remember that an exchange-traded fund (ETF) is a fund that trades like a stock.) Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Dividend appreciation First off, the "dividend appreciation" in the title likely refers to the fund's goal of focusing on stocks that not only pay dividends, but that pay growing (i.e., appreciating) dividends. But let's take a moment to simply appreciate dividends. Per S&P Global: Numerous academic studies have shown that dividend-paying stocks have historically outperformed non-dividend payers. However, much of the available dividend research focuses on the U.S. and other developed markets. A study published by Morgan Stanley Research showed that there is a strong relationship between dividend yield and total return in developed and emerging markets, with this link being the strongest in emerging markets. And per Dan Lefkovitz at Morningstar in February: Both the Morningstar Global Markets ex-US High Dividend Yield Index and the Morningstar Global ex-US Dividend Growth Index have outperformed the broad market for developed- and emerging-markets stocks outside the US. Whereas their US counterparts have failed to keep up, the international dividend benchmarks have been on top for the past five years. This is great news for anyone worried about the U.S. market and looking into deploying dollars abroad. Note that one reason dividend payers outperform is that they have generally grown to a meaningful size and are generating fairly reliable income before they commit to paying a dividend. Meet the Vanguard International Dividend Appreciation ETF The ETF "seeks to track the performance of the S&P Global Ex-U.S. Dividend Growers Index." Its primary focus is on large-cap stocks from both developed and emerging markets that have been hiking their dividend payouts regularly. It excludes U.S. stocks, so any portion of your portfolio that you devote to this ETF will fully expose you to foreign companies. How has the fund performed over time? Well, as of this writing, it's up 4.5% year to date, and up 5.57% over the past year. Its three-year and five-year average annual returns are 4.18% and 7.83%, respectively. The ETF's expense ratio (annual fee) is a very modest 0.1, meaning that you'll pay $10 annually per $10,000 you have invested in it. (Vanguard is known for ultra-low fees.) The Vanguard International Dividend Appreciation ETF recently held about 327 stocks, with between 16% and 20% of its assets in healthcare, industrial, and technology stocks. Nearly half of its assets were recently in European companies, with 30% in Pacific companies, close to 9% in emerging markets, and 12.6% in North America -- excluding the U.S., of course. Here are its recent top holdings: Stock Percent of ETF SAP SE 5.85% Roche Holding AG 4.56% Novartis AG 3.85% Nestle 3.16% Sony Group 3.13% Data source: as of Jan. 31, 2025. So what's this Vanguard ETF's dividend yield? Well, it's 1.85%. That's not huge, but it's not paltry, either. It's actually well above the S&P 500 's recent yield of 1.23%. Better still, it's designed to grow. The S&P 500, for example, encompasses dividend payers and non-payers, and payers that are growing their payouts regularly along with those that are increasing their dividends minimally or not at all. So give this fund some consideration -- especially if you're worried about the state of the U.S. economy and/or you think that companies based outside the U.S. have a lot to offer. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $315,521!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,476!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $495,070!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon. Continue » *Stock Advisor returns as of March 17, 2025 Selena Maranjian has positions in Novartis Ag and Roche Holding AG. The Motley Fool has positions in and recommends S&P Global. The Motley Fool recommends Nestlé and Roche Holding AG. The Motley Fool has a disclosure policy.
Globe and Mail
11-03-2025
- Business
- Globe and Mail
These 2 Vanguard ETFs Are Crushing the S&P 500 in 2025. Should You Buy?
After more than two years of a bull market run, the broader benchmark S&P 500 (SNPINDEX: ^GSPC) is starting to show some cracks. The index has given up all its post-election gains and finished Monday's trading down 4.5% on the year, hardly the move most investors hoped for after President Donald Trump promised a pro-business administration. Foreign markets have trailed the S&P 500 for years, but they're holding up better this year, and it may be their time to shine. These two Vanguard exchange-traded funds (ETFs) are crushing the S&P 500 so far in 2025. Should you buy? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » 1. Vanguard International Dividend Appreciation ETF The Vanguard International Dividend Appreciation ETF (NASDAQ: VIGI) has gotten off to a good start this year and is up 4.7% through Monday's close. The fund seeks to track large-cap stocks from developing and international markets with a record of growing dividends. The yield currently sits around 1.85%, which isn't what I'd call strong -- but it's better than the S&P 500's yield around 1.3%, and if you compare the ETF's total return to simple price appreciation, you can see how even this kind of yield makes a difference over time. VIGI data by YCharts For the past several months, many market strategists have recommended buying beaten-down international stocks over the U.S. stocks because of elevated valuations. Euphoria over artificial intelligence (AI) rocketed the S&P 500 to 57 all-time highs in 2024. Even before Trump implemented his tariffs and started a trade war, the S&P 500 looked fragile from a valuation standpoint. Over the past month or so, new economic data emerged, suggesting weakness in consumer spending, which started to raise concerns about a recession and possible stagflation. Most investors have been concerned about sticky inflation, so the data marked a turning point. The dollar has also weakened this year, which can often be bullish for international markets. Defense stocks in Europe have soared, as officials discuss increasing military spending. Chinese tech stocks have also done well as investors have grown bullish about the country's AI capabilities thanks to the emergence of DeepSeek. Here are the 10 largest stocks by weight in this Vanguard fund: SAP SE Roche Holding AG Novartis AG Nestle SA Sony Group Corp. Schneider Electric SE Sanofi SA Novo Nordisk Hitachi Reliance Industries 2. Vanguard International High Dividend Yield Index Fund ETF The Vanguard International High Dividend Yield ETF (NASDAQ: VYMI) has ripped by 8.8% this year, taking advantage of a shift to international and emerging markets. This fund enables investors to get exposure to stocks in international markets expected to have higher dividend yields. Roughly 44% of the fund is invested in European stocks, 26% is invested in stocks in the Pacific region, and about 21% in emerging markets. As the name suggests, this ETF also has a strong dividend yield. VYMI data by YCharts Dividend stocks are not a bad idea in this market, as reliable passive income looks a lot better than trying to play the volatility in this market. Additionally, dividends over time can compound and accumulate into significant wealth. While this ETF's dividend yield bounces around a bit, it's typically over 4%, which is considered a high-yield dividend. Here are the ETF's top 10 holdings by weight: Roche Holding Toyota Motor Corp. Nestle NA Novartis AG Shell HSBC Royal Bank of Canada Commonwealth Bank of Australia Siemens AG Mitsubishi UFJ Financial Group Inc. As you can see, some of the top 10 holdings are similar to the other Vanguard fund above. The big difference is that the Vanguard International High Dividend Yield ETF includes several international bank stocks. Banks are cyclical and can therefore take advantage of economic growth. While I'm not sure that international growth is expected to blow anyone away, the World Bank suggests that it's expected to grow in 2025 and 2026, while growth slows in China and the U.S. European Union countries like Germany have vowed to spend more, while the Federal Reserve Bank of Atlanta just lowered its first-quarter U.S. growth domestic product (GDP) expectations at the fastest rate since the pandemic. Things can change fast but international stocks will likely outperform if their GDP assumptions stay constant or tick up marginally and U.S. growth disappoints. Should you invest $1,000 in Vanguard Whitehall Funds - Vanguard International Dividend Appreciation ETF right now? 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