A Growth-Oriented Foreign Dividend Fund
Vanguard International Dividend Appreciation employs strict selection criteria to focus on high-quality stocks.
High-quality companies often have a defensive bent, making them a welcome addition to a diversified portfolio. They tend to exhibit lower volatility than the market and hold up better during drawdowns. Consistent dividend growth is a good proxy for quality because it demonstrates that the business is healthy and stable, and is run by a shareholder-friendly management team. Vanguard International Dividend Appreciation ETF (VIGI) seeks out these stocks outside the United States.
VIGI is poised for success over the long term. This low-cost fund prioritizes dividend growth over yield, which emphasizes highly profitable firms that should hold up better than most during market downturns and offer attractive long-term returns. However, its short track record limits its Morningstar Analyst Rating to Bronze.
Daniel Sotiroff has a position in the following securities mentioned above: VIG, VIGI. Find out about Morningstar’s editorial policies.