Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

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Sconie
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Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Sconie »

Anyone have any thoughts they could share with me on possibly using the soon-to-be-released Vanguard International High Dividend Yield Index instead of or as an alternative to Vanguard's Total Int'l Stock Market Index Fund(?).

I am thinking that the new fund might be a bit of a more "conservative" Int'l equity option. And then, of course----on the other hand----there is the thought of "don't mess" with what is already a very well diversified Int'l equity option.

Thanks in advance for your thoughts & insights.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan
ftobin
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by ftobin »

I don't have direct information on the index, but given that dividend stocks tend to correlate with a modest value play, I'd suspect it would perform similar to EFV (EAFE Value Index ETF) plus emerging markets, or also possibly similar to Vanguard's International Value fund (actively managed). The International Value fund also has weak value characteristics.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Wagnerjb »

I haven't studied the new fund, but it's ER is 0.16% higher than Total Intl. it is less diversified, and I worry that it may be less tax efficient in a taxable account.

On the other hand, if this fund provides a cheaper exposure to value internationally, it would be worth considering as a replacement for an international value find.

Best wishes
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Artsdoctor »

Jonathan Clements just posted his interest in using the international high dividend yield fund for himself.

The dividends generated from international funds are usually only partially qualified. Consequently, I'm not sure how tax-efficient a fund like this would be in a taxable account. If held in a tax-advantaged account, you wouldn't be eligible for a foreign tax credit.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by ogd »

Sconie wrote:I am thinking that the new fund might be a bit of a more "conservative" Int'l equity option. And then, of course----on the other hand----there is the thought of "don't mess" with what is already a very well diversified Int'l equity option.
I don't think you can count on it being even the slightest bit more conservative. Certainly the domestic High Dividend Index did worse than Total Stock Market during the financial crisis; it should be clear that what matters is the companies within not whether or not they pay dividends.

High dividend companies are often enough companies in trouble, which are valued low despite their high dividends because the market is worried about their prospects. A crisis can easily push them over the edge. The story might in fact be the opposite: like the larger value category, these companies might be (historically) slightly riskier for slightly higher rewards.

If you want more conservative, there's a simple, sound way to accomplish that: add some bonds. Then you don't have to guess: you know you're giving up some reward in return for lower risk. On top of that the extra diversification of a total index is a free bonus.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by JoMoney »

If you like dividends (for whatever reason), and the ER is kept low (which I think is a good bet with Vanguard), I would prefer a well diversified fund to stock picking.
Since you want to compare it to the even lower cost, broader diversified "Total Intl" fund, I have to go back to wondering why you would want to focus on dividends, when you can create whatever distribution % you want from selling shares. Do you expect dividend stocks will grow faster/higher returns?
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by abuss368 »

So how many Bogleheads are using Total International Stock with International High Yield?
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Ferdinand2014 »

abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
0% with my money.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by donaldfair71 »

abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
None. 100% all world ex-us in that exposure.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by drzzzzz »

abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by tibbitts »

drzzzzz wrote: Sun Jul 26, 2020 8:01 am
abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
Vanguard U.S. Growth has outperformed International Growth, so by your criteria that would be an even better idea. Neither fills the original objective, which can be variously interpreted as being more value-oriented, and seeking dividends. You might not agree with those objectives, but have to agree that International Growth has been terrible at meeting them.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by anon_investor »

drzzzzz wrote: Sun Jul 26, 2020 8:01 am
abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
Among its 10 largest holdings VWILX has at #4 5.1% in Tesla and at #6 2.7% in Amazon. Isn't that cheating to have 2 of the largest US growth stocks and call it an international growth fund?
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by abuss368 »

anon_investor wrote: Sun Jul 26, 2020 8:29 am
drzzzzz wrote: Sun Jul 26, 2020 8:01 am
abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
Among its 10 largest holdings VWILX has at #4 5.1% in Tesla and at #6 2.7% in Amazon. Isn't that cheating to have 2 of the largest US growth stocks and call it an international growth fund?
Now that is interesting. Only an active management fund could do that!
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by tibbitts »

abuss368 wrote: Sun Jul 26, 2020 9:54 am
anon_investor wrote: Sun Jul 26, 2020 8:29 am
drzzzzz wrote: Sun Jul 26, 2020 8:01 am
abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
Among its 10 largest holdings VWILX has at #4 5.1% in Tesla and at #6 2.7% in Amazon. Isn't that cheating to have 2 of the largest US growth stocks and call it an international growth fund?
Now that is interesting. Only an active management fund could do that!
Well, if you follow the argument that nobody needs to invest in international because large companies getting revenue from foreign markets, then this is kind of the logical extension. Managers are reasoning that these companies get revenue from international markets so they "count as" international.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by dkturner »

tibbitts wrote: Sun Jul 26, 2020 9:57 am
abuss368 wrote: Sun Jul 26, 2020 9:54 am
anon_investor wrote: Sun Jul 26, 2020 8:29 am
drzzzzz wrote: Sun Jul 26, 2020 8:01 am
abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
Among its 10 largest holdings VWILX has at #4 5.1% in Tesla and at #6 2.7% in Amazon. Isn't that cheating to have 2 of the largest US growth stocks and call it an international growth fund?
Now that is interesting. Only an active management fund could do that!
Well, if you follow the argument that nobody needs to invest in international because large companies getting revenue from foreign markets, then this is kind of the logical extension. Managers are reasoning that these companies get revenue from international markets so they "count as" international.
The beauty of active management is that the managers are actually allowed to think for themselves. A breath of fresh air.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Robot Monster »

dkturner wrote: Sun Jul 26, 2020 10:09 am
tibbitts wrote: Sun Jul 26, 2020 9:57 am
abuss368 wrote: Sun Jul 26, 2020 9:54 am
anon_investor wrote: Sun Jul 26, 2020 8:29 am
drzzzzz wrote: Sun Jul 26, 2020 8:01 am

We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
Among its 10 largest holdings VWILX has at #4 5.1% in Tesla and at #6 2.7% in Amazon. Isn't that cheating to have 2 of the largest US growth stocks and call it an international growth fund?
Now that is interesting. Only an active management fund could do that!
Well, if you follow the argument that nobody needs to invest in international because large companies getting revenue from foreign markets, then this is kind of the logical extension. Managers are reasoning that these companies get revenue from international markets so they "count as" international.
The beauty of active management is that the managers are actually allowed to think for themselves. A breath of fresh air.
A proponent of active management! I like it. That is a breath of fresh air.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by drzzzzz »

anon_investor wrote: Sun Jul 26, 2020 8:29 am
drzzzzz wrote: Sun Jul 26, 2020 8:01 am
abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
We use VWILX (Vanguard International Growth Fund) - higher expense ratio but superior returns per portfolio visualizer
Among its 10 largest holdings VWILX has at #4 5.1% in Tesla and at #6 2.7% in Amazon. Isn't that cheating to have 2 of the largest US growth stocks and call it an international growth fund?
Yes that is interesting (never looked at their holdings) - it must be what they consider their North American exposure, but totally agree with you that their concept of international isn't non-US.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by arcticpineapplecorp. »

Sconie wrote: Tue Dec 01, 2015 11:54 am Anyone have any thoughts they could share with me on possibly using the soon-to-be-released Vanguard International High Dividend Yield Index instead of or as an alternative to Vanguard's Total Int'l Stock Market Index Fund(?).

I am thinking that the new fund might be a bit of a more "conservative" Int'l equity option. And then, of course----on the other hand----there is the thought of "don't mess" with what is already a very well diversified Int'l equity option.

Thanks in advance for your thoughts & insights.
just ran across this old post. So have you looked up the performance comparison between the two so far? Not a lot of data, the VG international high dividend yield index has only been around since 2/26/16 but comparing the two you get (total international in blue and international high dividend yield index in orange:

Image

source: http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

now what do you think?

seems to have tracked fairly closely until coming out of the market decline the past few months, right?
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by 000 »

abuss368 wrote: Sat Jul 25, 2020 11:20 pm So how many Bogleheads are using Total International Stock with International High Yield?
I am not. I doubt many Bogleheads are: the mutual fund version has a 0.27% ER and 0.25% purchase and redemption fees. Not really a low cost index fund. Vanguard reports VIHAX has only $1.5 billion assets vs $399.1 billion for Total International.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Angst »

It might be a reasonable proxy for Int'l LCV, which could also help explain it's lagging recovery vs. Total Int'l. It is available as an ETF (VYMI) so one can avoid the MF purchase/redemption fees. And with all the recent fretting over Chinese share dilution, I'd have to think that the Chinese companies included in a fund like this would not be companies likely to be diluting shares. Maybe for some investors it's a fund worth considering.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Sconie »

arcticpineapplecorp. wrote: Sun Jul 26, 2020 9:08 pm
Sconie wrote: Tue Dec 01, 2015 11:54 am Anyone have any thoughts they could share with me on possibly using the soon-to-be-released Vanguard International High Dividend Yield Index instead of or as an alternative to Vanguard's Total Int'l Stock Market Index Fund(?).

I am thinking that the new fund might be a bit of a more "conservative" Int'l equity option. And then, of course----on the other hand----there is the thought of "don't mess" with what is already a very well diversified Int'l equity option.

Thanks in advance for your thoughts & insights.
just ran across this old post. So have you looked up the performance comparison between the two so far? Not a lot of data, the VG international high dividend yield index has only been around since 2/26/16 but comparing the two you get (total international in blue and international high dividend yield index in orange:

Image

source: http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

now what do you think?

seems to have tracked fairly closely until coming out of the market decline the past few months, right?

Hmm....I'm a bit surprised that Int'l High Yield fell further than Total Int'l during the recent decline. Absent other data, I would have thought that a higher dividend yield would have resulted in a lower beta for Int'l High Yield. Thank you arcticpineapplecorp....
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan
Angst
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by Angst »

Sconie wrote: Mon Jul 27, 2020 4:48 am
Hmm....I'm a bit surprised that Int'l High Yield fell further than Total Int'l during the recent decline. Absent other data, I would have thought that a higher dividend yield would have resulted in a lower beta for Int'l High Yield. Thank you arcticpineapplecorp....
Then you might be similarly surprised if you go to Morningstar and compare VTSAX to VYM (i.e. US TSM to Vanguard High Dividend Yield). It's the same thing! The graphs look essentially identical.

As I speculated in my previous post :
Angst wrote: Sun Jul 26, 2020 11:24 pm
It might be a reasonable proxy for Int'l LCV, which could also help explain it's lagging recovery vs. Total Int'l. It is available as an ETF (VYMI) so one can avoid the MF purchase/redemption fees. And with all the recent fretting over Chinese share dilution, I'd have to think that the Chinese companies included in a fund like this would not be companies likely to be diluting shares. Maybe for some investors it's a fund worth considering.
Hint: In Morningstar, try adding Vanguard Value Fund to the VTSAX vs. VYM comparison
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by tibbitts »

Sconie wrote: Mon Jul 27, 2020 4:48 am
arcticpineapplecorp. wrote: Sun Jul 26, 2020 9:08 pm
Sconie wrote: Tue Dec 01, 2015 11:54 am Anyone have any thoughts they could share with me on possibly using the soon-to-be-released Vanguard International High Dividend Yield Index instead of or as an alternative to Vanguard's Total Int'l Stock Market Index Fund(?).

I am thinking that the new fund might be a bit of a more "conservative" Int'l equity option. And then, of course----on the other hand----there is the thought of "don't mess" with what is already a very well diversified Int'l equity option.

Thanks in advance for your thoughts & insights.
just ran across this old post. So have you looked up the performance comparison between the two so far? Not a lot of data, the VG international high dividend yield index has only been around since 2/26/16 but comparing the two you get (total international in blue and international high dividend yield index in orange:

Image

source: http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

now what do you think?

seems to have tracked fairly closely until coming out of the market decline the past few months, right?

Hmm....I'm a bit surprised that Int'l High Yield fell further than Total Int'l during the recent decline. Absent other data, I would have thought that a higher dividend yield would have resulted in a lower beta for Int'l High Yield. Thank you arcticpineapplecorp....
I'm surprised you were surprised. I don't think this is unique to this market decline although it seems more pronounced than usual. It's mirrored more or less in U.S. results.
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Re: Vanguard Int'l High Dividend Yield Index vs Total Int'l Stock Index

Post by abuss368 »

This is a good thread!
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