Highest Ever for This International Stock ETF — But Analysts Say It Has Room to Run

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The Vanguard International High Dividend Yield ETF (VYMI) is currently reaching record highs, and it has already increased by 18% this year, as of the current date. Overall, international stocks are performing exceptionally well this year, with positive momentum driven by multiple trade agreements and temporary tariff suspensions in recent months.

While the Vanguard International High Dividend Yield ETF has reached its all-time high, this doesn’t necessarily mean it won’t continue to climb. In fact, the average predicted price among analysts covering the ETF suggests a potential increase of approximately 9% in the near future.

Beyond just this point, there are several compelling arguments that make a 4.2%-yielding index fund an attractive option for long-term investors in their portfolios. This year, I’ve chosen to invest in it myself, and I would feel confident in increasing my holdings, even with the current record-high share price, due to these reasons.

The Vanguard International High Dividend Yield ETF in a nutshell

This ETF, which is Vanguard International High Dividend Yield, typically selects stocks from foreign companies offering higher than average dividends compared to others.

This ETF follows an index containing over 1,500 stocks, with European companies comprising approximately 44% of the holdings. Companies from the Asia-Pacific region and emerging markets represent about 26% and 21%, respectively. There’s also a smaller percentage (8%) of investments in North American companies, specifically those based in Canada or Mexico.

A key aspect to note is that while many investors might think an ETF like this is filled with unknown companies, it’s actually not. If you examine the major holdings of the Vanguard International High Dividend YETF, you’ll find some brands that are likely quite familiar to you, even though they operate outside of the U.S.

Company Name (Ticker Symbol) % of ETF’s Holdings Dividend Yield
Nestle (OTC: NSRG.Y) 1.68% 3.8%
Roche Holding 1.53% 3.8%
Novartis (NVS) 1.51% 3.5%
HSBC Holdings (HSBC) 1.42% 5.3%
Shell (SHEL) 1.39% 4%
Commonwealth Bank of Australia 1.36% 1.3%
Royal Bank of Canada (RY) 1.24% 3.4%
Toyota (TM) 1.22% 3.6%

Similar to many Vanguard ETFs, the Vanguard International High Dividend Yield ETF boasts low operating costs. Compared to other specialized international index funds, its annual expense ratio of 0.17% is quite affordable. To clarify, this isn’t a direct fee you pay; instead, it influences the fund’s overall performance over time.

Cheaper than you might think

Regarding the Vanguard International High Dividend Yield ETF, despite its impressive showing this year, it remains an appealing investment option when considering its value. Here are some important metrics to consider, contrasting it with its U.S.-focused equivalent, the Vanguard High Dividend Yield ETF (VYM).

Metric VYMI (International) VYM (U.S.)
Average P/E ratio 12.0 19.8
Average P/B ratio 1.4x 2.9x
Earnings growth rate 13.3% 10.8%
PEG ratio (P/E divided by earnings growth rate) 0.90 1.83

The bottom line

Indeed, it’s important to remember that there are certain potential risks associated with foreign stock investments which need careful consideration. Some of these risks include tariff risks, exchange rate risks, and political or regulatory uncertainties in the specific country. However, it’s crucial to note that this area presents a significant discrepancy in valuation.

Essentially, despite the Vanguard International High Dividend Yield ETF reaching its highest price ever, it appears to be a worthwhile choice for a long-term investment, far from being overpriced. In fact, it could be an excellent option.

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2025-07-22 14:55