Subscribe to Entrepreneur for $5
Subscribe

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

Smart Beta ETF report for VIGI

By
This story originally appeared on Zacks

Making its debut on 03/03/2016, smart beta exchange traded fund Vanguard International Dividend Appreciation ETF (VIGI) provides investors broad exposure to the World ETFs category of the market.

- Zacks

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.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

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 $3.89 billion, this makes it one of the largest ETFs in the World ETFs. VIGI is managed by Vanguard. This particular fund seeks to match the performance of the NASDAQ International Dividend Achievers Select Index before fees and expenses.

The Nasdaq International Dividend Achievers Select 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.

Annual operating expenses for this ETF are 0.20%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.13%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

When you look at individual holdings, Nestle Sa (NESN) accounts for about 4.24% of the fund's total assets, followed by Roche Holding Ag (ROG) and Novartis Ag (NOVN).

Its top 10 holdings account for approximately 8.07% of VIGI's total assets under management.

Performance and Risk

So far this year, VIGI return is roughly 7.06%, and is up about 17.35% in the last one year (as of 10/13/2021). During this past 52-week period, the fund has traded between $70.22 and $93.17.

The fund has a beta of 0.75 and standard deviation of 19.87% for the trailing three-year period. With about 292 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard International Dividend Appreciation ETF is a reasonable option for investors seeking to outperform the World ETFs 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 $48.88 billion in assets, Vanguard FTSE Developed Markets ETF has $101.63 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.05%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.

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.



Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>



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

 

Vanguard International Dividend Appreciation ETF (VIGI): ETF Research Reports

 

Rogers Corporation (ROG): Free Stock Analysis Report

 

Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports

 

Novan (NOVN): Get Free Report

 

Vanguard Total International Stock ETF (VXUS): ETF Research Reports

 

To read this article on Zacks.com click here.

 

Zacks Investment Research