The Vanguard International Dividend Appreciation ETF (VIGI) was launched on 03/03/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Foreign Large Blend ETF category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $8.30 billion, this makes it one of the larger ETFs in the Foreign Large Blend ETF. VIGI is managed by Vanguard. This particular fund, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.10% for this ETF, which makes it one of the least expensive products in the space.
VIGI's 12-month trailing dividend yield is 1.81%.
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.
Looking at individual holdings, Nestle Sa (NESN) accounts for about 4.17% of total assets, followed by Sap Se (SAP) and Novartis Ag (NOVN).
Performance and Risk
The ETF return is roughly 13.54% so far this year and was up about 12.39% in the last one year (as of 06/10/2025). In the past 52-week period, it has traded between $75.29 and $90.63.
The fund has a beta of 0.75 and standard deviation of 14.44% for the trailing three-year period. With about 349 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 $93.65 billion in assets, Vanguard FTSE Developed Markets ETF has $160.44 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.
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Vanguard International Dividend Appreciation ETF (VIGI): ETF Research Reports SAP SE (SAP): 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).
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