Launched on 03/03/2016, the Vanguard International Dividend Appreciation ETF (VIGI) is a smart beta exchange traded fund offering broad exposure to the Foreign Large Blend ETF category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
VIGI is managed by Vanguard, and this fund has amassed over $6.97 billion, which makes it one of the larger ETFs in the Foreign Large Blend ETF. VIGI, before fees and expenses, seeks to match the performance of the NASDAQ International Dividend Achievers Select Index.
The S&P Global Ex-U.S. Dividend Growers Index focuses on high quality companies located in developed and emerging markets, excluding the United States, that have both the ability and the commitment to grow their dividends over time.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for VIGI are 0.10%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.12%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Sap Se (SAP) accounts for about 5.76% of the fund's total assets, followed by Roche Holding Ag (ROG) and Novartis Ag (NOVN).
Performance and Risk
The ETF has lost about -2.98% and is down about -1.72% so far this year and in the past one year (as of 04/07/2025), respectively. VIGI has traded between $77.08 and $88.89 during this last 52-week period.
The ETF has a beta of 0.74 and standard deviation of 14.48% for the trailing three-year period. With about 325 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard International Dividend Appreciation ETF is a reasonable option for investors seeking to outperform the Foreign Large Blend ETF segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $77.28 billion in assets, Vanguard FTSE Developed Markets ETF has $133.99 billion. VXUS has an expense ratio of 0.05% and VEA charges 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Blend ETF.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Vanguard International Dividend Appreciation ETF (VIGI): ETF Research Reports SAP SE (SAP): Free Stock Analysis Report Rogers Corporation (ROG): Free Stock Analysis Report Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports Vanguard Total International Stock ETF (VXUS): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
