Vanguard's International High Dividend Yield ETF outperforms S&P 500 ETFs in 2026 but lags over 10 years.

In 2026, Vanguard's International High Dividend Yield ETF (VYMI) has outperformed the popular US-focused Vanguard S&P 500 ETF (VOO) and Total Stock Market ETF (VTI), delivering higher returns and dividends without leverage or gimmicks. This reflects a shift as US markets, especially mega-cap tech stocks, appear overvalued, while international markets offer more reasonable valuations and income opportunities. However, over the past decade, VYMI has underperformed these US funds significantly. Investors should consider VYMI as a complementary holding for diversification and income, not a replacement for US core ETFs, balancing the potential for higher income with the risk of longer-term underperformance relative to US equities.