Vanguard International Dividend Appreciation ETF: For Defensive Investors Looking For International Exposure

Seeking AlphaETF AnalysisVanguard International Dividend Appreciation ETF: For Defensive Investors Looking For International ExposureOct. 27, 2020 4:06 AM ET|| About: Vanguard International Dividend Appreciation ETF (VIGI), Includes: HDVby: Michael A. Gayed, CFAMichael A. Gayed, CFA The Lead-Lag ReportAnticipate Corrections and Volatility with Award Winning ResearchSummaryThe Vanguard International Dividend Appreciation ETF is composed of developed and emerging market companies that have increased their annual dividends for 7 or more consecutive years.
It is heavily weighted towards more defensive cyclical sectors, somewhat capping the return.
The ETF strategy is less about income and more about stock selection.
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. - Warren Buffett
The unprecedented COVID-19-induced market crash in March 2020 struck fear into the hearts of investors everywhere. Since then, markets have recovered nicely. Surprisingly, during these times, many companies have maintained or grown their dividends rather than cutting or suspending them in times of financial need and flexibility. The S&P Dividend Growth rate has maintained a 2.85% growth rate as of September 2020. But in addition to dividends remaining stable, international markets - developed, emerging, and frontier - have offered enticing opportunities for investors. Emerging market equities, for example, are back to their pre-COVID-19 peak, as shown from the iShares MSCI Emerging Markets ETF (EEM).

The Vanguard International Dividend Appreciation ETF (VIGI) is a smart way for investors to gain international exposure by investing in high-quality, strong dividend-paying foreign companies. The ETF focuses more on stock selection rather than income and holds only companies that increased their annual dividends for 7+ years. The ETF is currently up 45.2% since March 23rd and is up 2.71% year to date. While VIGI does not have as strong a dividend yield as other ETFs... Read more

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