Yields Abroad: A Most Sensible Indulgence

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The S&P 500, in its relentless ascent, has begun to resemble a particularly ostentatious ballroom – crowded, brightly lit, and utterly devoid of genuine mystery. One suspects that value, like a shy wallflower, has retreated to the periphery. Yet, for those with the discernment to look beyond the immediate spectacle, opportunities remain. Indeed, to chase the latest peak is often to mistake motion for progress.

One finds a certain elegance, a quiet defiance of the commonplace, in considering the Vanguard International High Dividend Yield ETF (VYMI 1.27%). It is, if you will, a portfolio of whispers, a collection of yields emanating from corners of the globe most investors deem too…provincial. And yet, it is precisely in these overlooked locales that true value often resides.

A Worldly Assemblage

The fund, in its admirable simplicity, gathers a constellation of dividend-paying stocks from beyond our shores. Its expense ratio of 0.17% is a trifle, a mere acknowledgement of the cost of curation. Many of these enterprises, naturally, conduct their affairs in languages and customs foreign to our own, adding a delightful layer of complexity.

It boasts a breadth that is rather refreshing. Over 1,500 stocks, largely of established stature, contribute to its composition. Unlike certain domestic indices, where a handful of titans dominate, this fund distributes its weight more equitably. No single entity commands more than 1.8% of the portfolio – a testament to the virtues of diversification, and a subtle rebuke to the cult of personality.

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One might anticipate a collection of obscure entities, unknown and unloved. However, the holdings include such respectable names as Novartis (NVS 0.15%), Nestle (NSRGY 0.66%), and Toyota (TM 0.09%). These are not merely companies; they are institutions, weathered by time and circumstance, and possessed of a certain… gravitas.

A Bargain, Surprisingly

Despite its proximity to an all-time high – a condition often indicative of overvaluation – this ETF appears, dare one say, rather sensible. The average stock within the portfolio trades at a mere 13.5 times earnings, while simultaneously exhibiting an annual earnings growth rate of 12.8%. Compare this to its domestic counterpart, the Vanguard High Dividend Yield ETF (VYM +0.32%), which commands a P/E ratio exceeding 20, coupled with a comparatively sluggish earnings growth of 11.6%. One begins to suspect that the market, in its boundless enthusiasm, has mispriced a considerable opportunity.

Of course, venturing beyond our borders entails certain…risks. Currency fluctuations, geopolitical headwinds – these are the inevitable costs of engaging with a world that refuses to conform to our expectations. Yet, even accounting for these uncertainties, this ETF represents a compelling proposition. At its current price, it yields roughly 3% – a modest reward, perhaps, but one that is earned with a degree of sophistication rarely encountered in the modern market. It is, in essence, a subtle rebellion against the vulgarity of excess, a quiet affirmation of the enduring power of value.

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2026-01-31 21:12