Could This Be the Best High-Dividend ETF to Buy Right Now?
Investment Recommendation: The Vanguard International High Dividend Yield ETF (VYMI) is highlighted as a strong investment option due to its higher yield (approximately 4.2%) compared to U.S. counterparts, low expense ratio (0.22%), and diversified portfolio of over 1,500 stocks, including well-known international companies.
Valuation Insights: Despite trading near its 52-week high, VYMI is considered undervalued with a price-to-earnings ratio of 12 and a PEG ratio of 0.88, indicating potential for growth, although investors should be aware of risks associated with international investments such as currency fluctuations.
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Fee Reductions Announced: Vanguard has announced a reduction in expense ratios for 84 mutual fund and exchange-traded fund share classes across 53 funds.
Financial Impact: The total fee reductions are expected to amount to nearly $250 million by 2026.
VYMI Share Price Analysis: VYMI's share price is currently at $84.98, with a 52-week low of $65.23 and a high of $86.0768, indicating a relatively stable position within its trading range.
ETFs Trading Dynamics: Exchange traded funds (ETFs) function like stocks, with units that can be created or destroyed based on investor demand, impacting the underlying holdings and necessitating monitoring of share changes for notable inflows or outflows.
Investment Options: The Schwab U.S. Dividend Equity ETF, Vanguard International High Dividend Yield ETF, and Alerian MLP ETF are highlighted as solid choices for dividend-oriented investments, offering diverse exposure and strong yields.
Market Trends: The current market is heavily concentrated in megacap tech stocks, prompting a recommendation for investors to consider dollar-cost averaging into dividend ETFs to enhance portfolio diversity.
Performance Metrics: The Schwab U.S. Dividend Equity ETF has a 3.7% yield and a 12.3% average annual return over the past decade, while the Vanguard ETF has seen a 28% total return this year and the Alerian MLP ETF offers an 8.1% yield with a 24.7% average annual return over five years.
Tax Advantages: The Alerian MLP ETF simplifies tax reporting by providing a single 1099 form, making it more convenient for investors compared to individual master limited partnerships (MLPs) that require K-1 forms.
VYMI Share Price Analysis: VYMI's share price is currently at $85.05, with a 52-week low of $65.23 and a high of $85.61, indicating a stable position near its high point.
ETFs Trading Dynamics: ETFs function like stocks, trading in "units" that can be created or destroyed based on investor demand, affecting the underlying assets and their market dynamics.
Vanguard International High Dividend Yield ETF Performance: The fund has delivered a remarkable 26.6% total return year-to-date, significantly outperforming the S&P 500's 10.8% gain, while offering a 4.2% annual yield.
Investment Advantages: With a low expense ratio of 0.17%, the fund provides exposure to 1,549 international dividend-paying stocks, offering income stability and currency diversification, making it an attractive option for investors seeking reliable returns.
Investment Options: Investors can choose to buy individual stocks or exchange-traded funds (ETFs) like the Vanguard International High Dividend Yield ETF, which offers exposure to nearly 1,600 global dividend stocks for under $100.
Performance and Risk: The Vanguard ETF has a dividend yield of nearly 4%, significantly higher than the S&P 500 average, but carries Vanguard's highest risk rating due to its focus on international stocks and high-yielding investments.











