Vanguard International High Dividend Yield ETF (VYMI): My International ETF for Tiers One Through Three

If you've read through my DGI Crab stock profiles, you may have noticed something.

Every one of my 50 individual stocks is headquartered in the United States.

That wasn't an accident.

I believe the United States is still home to many of the world's greatest businesses, and I want those companies to form the foundation of my dividend growth portfolio.

But I also recognize something else.

Great businesses exist outside the United States too.

That's exactly why I own VYMI.

Rather than trying to research individual international companies, I prefer owning one low-cost ETF that gives me exposure to hundreds of dividend-paying businesses from around the world.

For me, VYMI is the international complement to my U.S. dividend portfolio.

Key Statistics

• Ticker: VYMI
• Role: International ETF for Tiers One, Two, and Three
• Investment Style: International High Dividend Yield
• Fund Inception: February 25, 2016
• Expense Ratio: 0.07% (Reduced from 0.17% in 2026 as part of Vanguard's broad expense-ratio reductions.)
• Number of Holdings: Approximately 1,500
• Dividend Yield: Approximately 3.9%
• Index Tracked: FTSE All-World ex U.S. High Dividend Yield Index

VYMI is a passive Vanguard ETF that seeks to track the performance of large- and mid-cap international companies expected to have above-average dividend yields.

Why VYMI Fits Tiers One Through Three

Throughout the first three tiers, my focus is simple.

Own outstanding businesses.

Buy them when they're attractively valued.

Reinvest the dividends.

Repeat.

The majority of those businesses happen to be American companies.

VYMI doesn't change that philosophy.

It simply expands it beyond our borders.

Instead of trying to identify the best dividend stock in Japan, Switzerland, Canada, the United Kingdom, Australia, or France, I allow Vanguard to own hundreds of them for me.

That's exactly the role I want VYMI to play.

What Does VYMI Own?

VYMI invests in approximately 1,500 companies located outside the United States.

The portfolio spans both developed and emerging markets, with significant exposure to countries such as:

• Japan
• United Kingdom
• Switzerland
• Canada
• France
• Germany
• Australia

Because the fund emphasizes above-average dividend yields, you'll often find globally recognized companies from industries such as financial services, pharmaceuticals, consumer staples, energy, telecommunications, industrials, and materials.

Rather than concentrating on one country or one industry, VYMI spreads your investment across the international dividend-paying universe.

Where This Income Comes From

VYMI's income comes from one source.

Dividends.

The companies held inside the ETF generate profits and return a portion of those profits to shareholders through regular dividend payments.

VYMI collects those dividends from hundreds of international companies and distributes them to investors.

In simple terms:

International businesses earn profits. They pay dividends. VYMI collects those dividends. Investors receive the income.

Unlike many of my Tier Four ETFs, VYMI doesn't rely on covered calls, option premiums, leverage, or other income-enhancing strategies.

It's straightforward dividend investing.

Why I Like VYMI

One question I receive from time to time is why I don't own more international stocks individually.

The answer is simple.

I don't believe I have an informational advantage researching companies headquartered all over the world.

Instead, I'd rather let a low-cost Vanguard ETF do that work for me.

For just a 0.07% expense ratio, I gain exposure to roughly 1,500 international companies.

That's remarkable diversification at an incredibly low cost.

What makes VYMI even more attractive is Vanguard's decision to reduce the fund's expense ratio from 0.17% to just 0.07% in 2026. It was one of the largest fee reductions Vanguard announced that year and is another example of the company's shareholder-first philosophy.

Lower expenses may not seem exciting, but they quietly make a meaningful difference over decades of investing. Every dollar that isn't spent on management fees is another dollar that stays in your portfolio, continues compounding, and generates future dividend income.

That's one of the many reasons Vanguard has earned my trust over the years, and why VYMI has become my international ETF of choice for Tiers One through Three.

Who Is This ETF For?

VYMI is ideal for investors who:

• Are building a Tier One, Tier Two, or Tier Three portfolio.
• Want international diversification without researching individual foreign companies.
• Prefer dividend-paying businesses.
• Appreciate extremely low expenses.
• Want a simple "buy it and hold it" international ETF.

For me, VYMI is the only international equity ETF I need during the wealth-building and dividend-growth years.

Why Only One International ETF?

Some investors build portfolios with five or six international funds.

That's never appealed to me.

My international allocation isn't meant to compete with my U.S. holdings.

It's meant to complement them.

America remains the centerpiece of my dividend growth strategy.

VYMI simply allows me to participate in the success of outstanding businesses located around the rest of the world.

Sometimes, simple is better.

Final Thoughts from the DGI Crab

International diversification doesn't have to be complicated.

VYMI provides broad exposure to approximately 1,500 dividend-paying companies outside the United States.

It keeps expenses exceptionally low.

It focuses on businesses with above-average dividend yields.

And it fits naturally alongside the individual U.S. dividend stocks that make up the core of my portfolio.

I don't need to become an expert on Japanese banks, Swiss pharmaceutical companies, or British consumer staples businesses.

Vanguard has already built that portfolio for me.

If I had to summarize VYMI in one sentence, it would be this:

Keep America as the foundation of your portfolio, but let the rest of the world contribute to your dividend growth.

That's exactly why VYMI is my international ETF for Tiers One through Three.

DGI Crab Summary

Role in the Portfolio: Provide broad international diversification while complementing a portfolio built around high-quality U.S. dividend stocks.

Where This Income Comes From: Dividends paid by approximately 1,500 companies located outside the United States.

Should This Replace My U.S. Dividend Stocks? No. VYMI is designed to complement your U.S. holdings, not replace them. The United States remains the foundation of my dividend growth strategy, while VYMI allows me to participate in dividend growth around the world through one simple, low-cost ETF.