What VYMI actually is

VYMI is Vanguard’s international dividend fund. It holds companies outside the United States that are expected to pay above-average dividends, covering developed markets such as Europe and Japan and emerging markets as well.

What is inside

Many of the holdings are banks, energy, materials and consumer companies, because these sectors tend to pay larger dividends in other countries. It offers a way to diversify away from the US market and the heavy weight of US technology companies.

Distributions

It pays quarterly. The yield is typically higher than US broad-market funds. Foreign companies can pay different amounts at different times of the year, and foreign taxes may be withheld before the fund pays you.

What to keep in mind

  • Currency swings. A stronger dollar lowers returns from foreign income.
  • Foreign taxes and rules. Dividend taxation varies by country.
  • Political risk. Some markets are less stable.
  • Concentration. Banks and energy can be a large share.

Quick take

VYMI is a simple way to add international dividend income to a US-heavy portfolio, with currency and tax differences to understand.