Vanguard's New International Fund Targets Dividend Growth
Investors may be skittish about buying international stocks, but this new Vanguard fund that targets stable dividend growers could ease their minds.
International stocks have long been out of favor and somewhat volatile, which has some investors skittish about venturing overseas. But a new actively managed fund focused on companies that are committed to raising their dividends may offer a more stable ride.
The Vanguard International Dividend Growth (VIDGX) launched in November. It's run by the same Wellington Management team that's behind Vanguard Dividend Growth (VDIGX), the longtime standout U.S. stock fund, and the two mutual funds share the same investment philosophy and approach. The new fund is designed, in fact, to be paired with the U.S.-focused Dividend Growth fund.
Homing in on dividend growth is a way to find superior businesses, says manager Peter Fisher, who as of the end of 2023 heads both Dividend Growth and International Dividend Growth. "Companies committed to paying and raising a dividend are disciplined about how they allocate capital," he says. "They tend to be less risky and less cyclical businesses, and they have clean balance sheets." The end result is a portfolio of high-quality companies that tends to do relatively well when markets are weak.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Fisher is not a new hand at foreign stock investing or dividend growth stock investing. He has been working with Wellington's dividend growth strategy team since 2012. And he has run a global dividend growth strategy since 2016, as well as an international dividend growth strategy since 2019, geared for both wealthy clients and institutional clients.
The fund, which charges a 0.54% expense ratio, is too new to talk about many specifics, including performance. But Fisher says the portfolio will hold about 40 stocks in well-known, multinational companies based in Europe, Japan, Hong Kong and Canada.
He expects the fund to yield roughly 3% and that companies in the portfolio will boast annual dividend increases of 10%, on average.
And there will be little turnover of names in the portfolio. "We're buying to own for the life of the fund," says Fisher. "We want to find businesses that we can be partners with and owners of for the long term." We'll be watching it carefully for now, until it has a longer track record.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
- Many Mutual Funds Are Converting To ETFs: What To Know
- What Are the Types of Mutual Funds?
- Vanguard ETFs vs Mutual Funds: Which Make for Better Investments?
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.
-
How to Help Your Kids Without Ruining Your Retirement
Here are some general considerations to ensure the gift of assets to your kids will not negatively affect your financial future.
By Mario Hernandez Published
-
AI to Power the Next Generation of Robots
The Kiplinger Letter There's increasing buzz that the tech behind ChatGPT will make future industrial and humanoid robots far more capable.
By John Miley Published
-
You Should Be Investing in a 529 Now for Your Kids' or Grandkids' Tuition
Learn how to maximize investing in a 529, a state-sponsored college education savings account for qualifying educational expenses.
By Emma Patch Published
-
What Experts See In Economic Signals For 2024
Experts assess economic signals for 2024.
By Simon Constable Published
-
How Inflation, Deflation and Other 'Flations' Impact Your Stock Portfolio
There are five different types of "flations" that not only impact the economy, but also your investment returns. Here's how to adjust your portfolio for each one.
By Kim Clark Published
-
9 Tips to Successfully Rent Out Your Home
Many people don't want to sell homes with low mortgages, so a more attractive option is renting. There are many steps to make renting out your home work.
By Daniel Bortz Published
-
Why I Love Boring Stocks: Glassman
The best "boring stocks" can produce solid returns for investors with little drama. Here are a few that I like.
By James K. Glassman Published
-
Where Can the Magnificent Seven Stocks Go in 2024?
The Magnificent Seven have been driving stock returns. Here, we take a close look at the mega-cap hotshots to see what's next.
By Nellie S. Huang Published
-
How Does the Federal Reserve Work?
The Federal Reserve has been a major plotline in the economy over the last two years. So, how does the Federal Reserve work?
By Kim Clark Published
-
Why I Still Won't Buy Gold: Glassman
One reason I won't buy gold is because while stocks rise briskly over time – not every month or year, but certainly every decade – gold does not.
By James K. Glassman Published