The Vanguard International Dividend Appreciation ETF (VIGI) made its debut on 03/03/2016, and is a smart beta exchange traded fund that provides broad exposure to the Foreign Large Blend ETF category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Because the fund has amassed over $9.31 billion, this makes it one of the larger ETFs in the Foreign Large Blend ETF. VIGI is managed by Vanguard. Before fees and expenses, VIGI 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.07%.
VIGI's 12-month trailing dividend yield is 2.06%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Royal Bank Of Canada (RY) accounts for about 4.77% of the fund's total assets, followed by Novartis Ag (NOVN) and Roche Holding Ag (ROG).
Performance and Risk
So far this year, VIGI has added roughly 4.18%, and was up about 14.93% in the last one year (as of 02/18/2026). During this past 52-week period, the fund has traded between $75.29 and $96.23.
The fund has a beta of 0.71 and standard deviation of 12.58% for the trailing three-year period. With about 357 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 $137.52 billion in assets, Vanguard FTSE Developed Markets ETF has $214.37 billion. VXUS has an expense ratio of 0.05% and VEA changes 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.
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Vanguard International Dividend Appreciation ETF (VIGI): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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