Is Vanguard International Dividend Appreciation ETF (VIGI) a Strong ETF Right Now?
Smart Beta ETF report for VIGI
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.
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.
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.
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
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
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