VYMI — The Vanguard Dividend ETF That Beat VOO and VTI Across Both Time Frames
VYMI — The Vanguard Dividend ETF That Beat VOO and VTI Across Both Time Frames
Only one fund out of 76 Vanguard ETFs made the top five in both the five-year and one-year rankings. Not VOO. Not VTI.
VYMI — the Vanguard International High Dividend Yield ETF.
Over 1,500 stocks across 40-plus countries. Heavily weighted toward financials and energy. A 14.92% average annual return over five years, turning $10,000 into $20,044. A 45.59% return over the last twelve months, ranking second overall. It beat every single US large-cap ETF. Across both time frames.
Most investors have never even heard of it.
VYMI vs Popular ETFs: The Numbers
| Fund | 5yr ($10K→) | 1yr ($10K→) | 5yr Avg Annual | Yield |
|---|---|---|---|---|
| VYMI | $20,044 | $14,559 | 14.92% | High |
| VOO | $19,381 | — | — | Low |
| VTI | $18,165 | — | — | Low |
| MGC | $19,760 | — | — | Low |
| VDE | $28,325 | — | — | Moderate |
VDE wins on raw five-year returns. But VDE didn't make the one-year top five. VYMI is the only ETF that placed in the top five across both time frames.
Same International Dividends, $6,000 Apart
The most striking comparison within Vanguard's four dividend ETFs is VYMI versus VIGI.
VYMI: international high dividend — companies paying the most right now. VIGI: international dividend growth — companies that have been raising dividends year after year.
Same international markets, same dividend theme. But over five years: VYMI $20,044 versus VIGI $13,778. A $6,266 gap.
Over the last five years, companies paying the highest dividends now decisively beat companies slowly growing their dividends. Immediate yield outperformed future yield. That's a clear verdict on which approach actually delivered.
Two Forces Behind 45.59% in One Year
VYMI's one-year return of 45.59% was driven by two converging forces.
First, the valuation gap narrowing. International stocks were trading at price-to-earnings ratios nearly half of the S&P 500's. As the perception that US stocks were overvalued spread, capital rotated into cheaper international markets.
Second, dollar weakness. Every stock VYMI holds is priced in a foreign currency. When the dollar drops, those foreign-currency holdings become worth more in dollar terms. It's a bonus return layered on top of actual stock performance.
These two forces reinforced each other. Valuation re-rating plus currency tailwinds amplified returns in a way that neither factor alone could have produced.
VPL: The Single Best Year Across All 76 ETFs
While discussing international funds, VPL (FTSE Pacific ETF) deserves attention.
VPL returned 55.59% in one year — the highest single-year return across all 76 ETFs. $10,000 became $15,559.
VPL is roughly 60% Japan. This was the year Japanese companies aggressively bought back stock, expanded dividends, and restructured balance sheets in unprecedented ways. Earnings surged. Currency effects amplified everything.
But VPL's five-year return was $15,966, middle of the pack in its own segment. Four out of five years were average. The entire 55% gain was concentrated in the final twelve months.
If you'd given up on this fund two years ago, you would have missed the single highest one-year return on the entire platform.
Leadership Rotates
| Time Frame | Dominant Region | Top 5 Characteristics |
|---|---|---|
| 5 years | US | Sector ETFs + value + mega-cap |
| 1 year | International | Japan + intl dividends + emerging |
The US dominated over five years. International markets flipped the script over one year. Four of the five top one-year performers were international funds. Not a single US stock ETF made the cut.
Whoever is winning right now is not guaranteed to be winning five years from now. Leadership rotates, and it rotates hard.
What makes VYMI compelling is that it performed well across both time frames — not riding a one-time event, but backed by a structural case: undervaluation, high dividends, and dollar weakness. That valuation gap between international and US stocks still hasn't fully closed.
FAQ
Q: Is VYMI only for income-focused investors? A: No. While the high dividend yield provides income, the total return (price appreciation plus dividends) is what drove VYMI's five-year performance past VOO and VTI. Income is a component, not the entire thesis.
Q: What happens to VYMI if the dollar strengthens again? A: Dollar strength creates a headwind for all international funds priced in foreign currencies. VYMI's foreign holdings would be worth less in dollar terms. However, its high dividend yield provides a partial buffer that pure-growth international funds don't have.
Next Posts
NASDAQ -5%, S&P -3% — What 70 Years of Market History Tell Us About Today's Fear
NASDAQ -5%, S&P -3% — What 70 Years of Market History Tell Us About Today's Fear
The S&P 500 has recovered after every major crisis since 1950 — Korean War, Black Monday, 9/11, 2008, COVID — without exception. Current declines of NASDAQ -5% and S&P -3% are minor by historical standards. Buffett calls it "nothing." The biggest returns have gone to those who bought during genuine fear.
Cisco's 25-Year Recovery, Microsoft's 80% Crash — What the Dot-Com Bubble Teaches About Investing
Cisco's 25-Year Recovery, Microsoft's 80% Crash — What the Dot-Com Bubble Teaches About Investing
Cisco took 25 years to recover its dot-com peak, yet from the post-bubble bottom both stock price and profits grew 10x. Microsoft fell 80% in the crash but is now among the world's most valuable companies. Short-term, the market is a voting machine driven by emotion; long-term, it's a weighing machine measuring fundamentals.
Palantir (PLTR) at $381B — Can a P/E of 234 Be Justified?
Palantir (PLTR) at $381B — Can a P/E of 234 Be Justified?
Palantir market cap $381B, P/E 234, P/S 85 (7x Microsoft). Analyst revenue estimate of $22B in 4 years at Microsoft's P/S yields only $265B — below current valuation. Intrinsic value range: $37-$339 (mid $118). Executives are net sellers. Balance sheet is excellent but price is the core risk.
Previous Posts
VDE — The Vanguard ETF That Turned $10,000 Into $28,325 in Five Years
VDE — The Vanguard ETF That Turned $10,000 Into $28,325 in Five Years
Out of 76 Vanguard ETFs, VDE (Energy ETF) took the five-year crown: $10,000 became $28,325. A $7,000+ gap over second place. VOO and VTI didn't even make the top five. But the return was driven by a once-in-a-decade COVID-to-oil-boom setup.
Value vs Growth — What 76 Vanguard ETFs Reveal About Rate Cycle Winners
Value vs Growth — What 76 Vanguard ETFs Reveal About Rate Cycle Winners
Testing all 76 qualifying Vanguard ETFs shows value dominated every segment over 5 years: small cap value VBR at $16,149 vs growth VTWG at $11,215 — a $5,000 gap. But over 1 year, growth staged a comeback. Rate cycles determine winners.
Does Investing in Dollars Eliminate Currency Risk? The GIFT City FX and Tax Reality
Does Investing in Dollars Eliminate Currency Risk? The GIFT City FX and Tax Reality
USD-denominated GIFT City investments still carry currency risk when underlying assets are INR-based. Rupee depreciated 3–4% annually over the past decade — Indian equities returning 12% in INR yield roughly 8% in USD. Real advantage: saving 1–3% round-trip conversion costs. Indian tax exemption doesn't cover home-country obligations.