The start of 2025 has been anything but smooth for U.S. stocks, with the S&P 500 facing significant pressure while investors turn to managed funds like Vanguard ETFs for stability.
On March 10, markets plunged as investor sentiment soured after President Donald Trump acknowledged that the world’s largest economy was in a ‘period of transition’ when asked about a potential downturn this year.
Mounting concerns over the economy’s health and trade uncertainties have sent all three major indexes deeper into the red, marking one of the most volatile sessions of the year.
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The Dow Jones Industrial Average plunged over 2% while the S&P 500 slid 2.7%, recording its worst day since September. The Nasdaq Composite bore the heaviest losses, tumbling 4%, its steepest single-day drop since 2022.
The ‘Magnificent Seven’ tech stocks led the downturn, dragging the Nasdaq even lower. As of press time, all three indexes remain in negative territory.
Amid shifting market dynamics, many investors are looking beyond domestic markets for better stability and returns. One standout alternative has been the Vanguard International High Dividend Yield ETF (NYSEARCA: VYMI), which has surged over 8% year-to-date, significantly outperforming the S&P 500.
With its strong dividend payouts and broad global diversification, VYMI is emerging as an attractive hedge against ongoing U.S. market volatility.
Vanguard International High Dividend Yield ETF (NYSEARCA: VYMI)
The Vanguard International High Dividend Yield ETF seeks to track the performance of the FTSE All-World ex US High Dividend Yield Index. The fund focuses on companies located in developed and emerging markets, excluding the United States, that are forecasted to have above-average dividend yields.
VYMI has been a consistent performer, returning 13.19% over the past year, 7.41% over three years, and 9.97% over five years. Since launching in 2016, it has averaged 8.5% annually, making it a solid choice for investors looking for reliable income and long-term stability.
As of press time, VYMI is trading at $73.81, delivering a 4.97% dividend yield, nearly three times that of the S&P 500.
With a diversified portfolio of 1,498 stocks, the fund holds major global players like Roche Holding, Toyota Motor Corp (NYSE: TM), and Nestlé SA among its top positions. The fund allocates approximately 44% of its assets to European stocks, 26% to the Pacific region, and 21% to emerging markets, ensuring broad geographic diversification.
Despite its impressive returns and global exposure, VYMI remains a cost-effective investment choice with an expense ratio of just 0.17%, meaning a $500 investment incurs only $0.85 in annual fees.
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