3 International Funds for US Investors Seeking Higher Dividends

If you’re a US investor thinking your domestic dividend fund’s yield looks weak lately, there’s some good news and bad news. The good news is the average 2.0% yield of a broad group of 88 domestic dividend funds wasn’t that much lower than their 10-year average of 2.3%. The bad news is that 2.0% and 2.3% yields are pretty puny.

American investors do have an alternative, however: international funds that reap dividends abroad. That’s because non-US stocks tend to pay higher dividends than domestic equities. Here are three funds that have Morningstar Medalist Ratings of Silver that illustrate the range of options for international dividend funds.

It’s important to mention that non-US dividends may face double taxation—by the country of origin and by the US. That said, many countries have agreements with the US to provide relief from double taxes, and the US’ foreign tax credit also offsets foreign taxes. Still, taxes can crimp foreign dividends.

Vanguard International High Dividend Yield Index VIHAX had a yield of 4% in August 2025. Its overall returns have been good, too: Its annualized gain from its 2016 inception through August 2025 was 10%, which ranked just outside the top quartile in its foreign large value Morningstar Category. Plus, this fund is cheap and well-diversified: It has a 0.17% expense ratio, and it recently held roughly 1,600 stocks. Because expenses are subtracted from portfolio income, low fees tend to promote higher yields.

As a side note, Vanguard has a number of other domestic and international-stock funds that have solid yields. Other good Vanguard options include Vanguard Energy VGENX, Vanguard Real Estate Index VGSIX, and Vanguard International Explorer VINEX.

DFA International Small Cap Value DISVX is another broadly diversified foreign-equity fund with a tiny expense ratio. It’s a bit more off the beaten path in the small/mid-value universe, so it likely provides nice diversification to your overall portfolio. Over the past decade, its average rolling 12-month yield was 2.6%, but in August 2025, it was 3.5%. International small-caps have lagged the past decade, so the fund’s 8.9% annualized return might not look great compared with that of a domestic equity fund. But in the first eight months of 2025, it jumped 36% (the S&P 500 gained just 11%). Its small/mid-blend sibling, DFA International Small Company DFISX, also produces attractive dividend income.

Turning to more specialty players, Lazard Global Listed Infrastructure GLIFX retains the foreign flavor, but the 30-stock fund focuses on areas known especially for dividends; more than 50% of the portfolio is in utilities, with another 33% in industrials. Over the past decade, its rolling 12-month yield has averaged a plump 3.7%, but in August it was 2.7%. Of the funds here with 10-year annualized returns, this fund’s was the best at 9.9%.

This article first appeared in the August 2025 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor by visiting this website.