A Better High-Yield Strategy
Vanguard International High Dividend Yield ETF's ability to control risk is a big appeal.
Yields have declined over the past several decades, driving some investors into high-yielding stocks to shore up their income. Fund providers have responded to this desire with rules-based strategies specifically focused on yield. But it's important to remember that high-yielding stocks can be riskier than the overall market. Therefore, the risk management aspect of yield-centric funds becomes an important part of their investment merit. Furthermore, investors should not lose sight of the basic principles that have led to improved long-term performance. Low fees and portfolio diversification should not be abandoned in the quest for yield.
Vanguard International High Dividend Yield ETF (VYMI) strikes a careful balance between risk management and yield, earning a Morningstar Analyst Rating of Bronze.
Daniel Sotiroff does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.