Why This International ETF Might Be the Most Underrated Investment of 2026
2026-08-05 14:30
•Todd Shriber •The Motley Fool
•••• ••• Axe Cap view
VYMI: A Quiet Winner for Income Seekers in 2026
The Vanguard International High Dividend ETF leads global income plays with steady dividends and low costs.
The Vanguard International High Dividend ETF (VYMI) is quietly delivering strong returns this year, beating the S&P 500 and broader international ETFs. What catches the eye is its focus on high-quality dividend payers and minimal tech exposure—a refreshing contrast to the crowded tech bets that dominate many portfolios. With a 3.5% dividend yield and a ridiculously low 0.07% expense ratio, VYMI offers efficient income without the high volatility usually linked to tech-heavy funds. For South African investors, this adds diversification beyond the usual resources and financial sectors tied to the rand. However, its exposure leans heavily towards financials and industrials globally, which don’t always track local economic cycles closely. If the dollar weakens sharply against the rand, the rand value of these dividends could fall, muting returns here. Still, for patient investors hunting yield outside JSE champions like Sanlam or FirstRand, VYMI deserves a look. this is just our opinion and not financial advice
Start with a small position in VYMI to diversify foreign income exposure, especially if your local holdings are heavily resource or rand-dependent. Trim if the rand strengthens significantly, or if your local financials regain momentum.
- VYMI
- USD/ZAR
- Rand strengthening reduces rand value of foreign dividends
- Global financial sector downturn hitting ETF holdings
6/10
The Vanguard International High Dividend ETF (VYMI) is outperforming both the S&P 500 and broader international ETFs in 2026, despite receiving limited attention. With a $19.5 billion asset base, a 3.5% dividend yield, and a low 0.07% expense ratio, the fund offers quality dividend stocks with minimal tech exposure (5.4%) and strong exposure to financial services and industrial sectors.
Our take is based on reporting first published by The Motley Fool.