A smart beta exchange traded fund, the Vanguard International Dividend Appreciation ETF (
VIGI Quick Quote VIGI - Free Report) debuted on 03/03/2016, and offers broad exposure to the World ETFs category of the market. What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Vanguard. VIGI has been able to amass assets over $3.51 billion, making it one of the largest ETFs in the World ETFs. This particular fund seeks to match the performance of the NASDAQ International Dividend Achievers Select Index before fees and expenses.
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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for VIGI are 0.15%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 9.43%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Nestle Sa (NESN) accounts for about 4.49% of total assets, followed by Roche Holding Ag (
ROG Quick Quote ROG - Free Report) and Novartis Ag . Performance and Risk
The ETF has lost about -20.20% and is down about -15.88% so far this year and in the past one year (as of 06/23/2022), respectively. VIGI has traded between $67.40 and $93.17 during this last 52-week period.
VIGI has a beta of 0.76 and standard deviation of 20.46% for the trailing three-year period. With about 351 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 Quick Quote VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF ( VEA Quick Quote VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $45.03 billion in assets, Vanguard FTSE Developed Markets ETF has $90.79 billion. VXUS has an expense ratio of 0.07% 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.