Is Vanguard International Dividend Appreciation Index Fund ETF Shares (VIGI) a Strong ETF Right Now?

Designed to provide broad exposure to the Foreign Large Blend ETF category of the market, the Vanguard International Dividend Appreciation Index Fund ETF Shares (VIGI) is a smart beta exchange traded fund launched on 03/03/2016.

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.

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.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

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

The fund is sponsored by Vanguard. It has amassed assets over $9.26 billion, making it one of the larger ETFs in the Foreign Large Blend ETF. 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

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.07% for VIGI, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 2.01%.

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.

Taking into account individual holdings, Royal Bank Of Canada (RY) accounts for about 4.9% of the fund's total assets, followed by Mitsubishi Ufj Financial Group Inc and Nestle Sa (NESN).

Performance and Risk

The ETF has added roughly 9.62% and it's up approximately 13.16% so far this year and in the past one year (as of 08/26/2026), respectively. VIGI has traded between $85.45 and $99.66 during this last 52-week period.

The fund has a beta of 0.70 and standard deviation of 12.97% for the trailing three-year period. With about 369 holdings, it effectively diversifies company-specific risk .

Alternatives

Vanguard International Dividend Appreciation Index Fund ETF Shares 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 Index Fund ETF Shares (VXUS) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets Index Fund ETF Shares (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock Index Fund ETF Shares has $164.36 billion in assets, Vanguard FTSE Developed Markets Index Fund ETF Shares has $239.85 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

Boost Your Portfolio with Our Top ETF Insights

Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.

Don’t miss out on this valuable resource. It’s free!

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research