Passive income generation isn't as passive as investors expect. Real estate is labor-intensive. It can take awhile to find profitable investments. It doesn't have to be hard. Looking for an easy passive income source? The dividend yield of one Vanguard ETF is nearly 4.9%.
Consider investing abroad with ETFs, which allow you a broad stock portfolio in one go. Vanguard is an ETF leader noted for its low-cost ETFs. Many of its ETFs pay handsome dividends. You must think worldwide for bountiful harvests.
Vanguard International High Dividend Yield Index Fund ETF (NASDAQ: VYMI) delivers. It only includes overseas stocks, not U.S. Only stocks with significant dividend yields are owned. This Vanguard ETF's top holdings are likely familiar. Toyota Motor, Novartis, Shell, Roche, and HSBC are the fund's five largest holdings. The Vanguard International High Yield Index Fund ETF isn't expensive like some passive income products. ETF shares are below $70.
Why income investors might consider this Vanguard ETF Vanguard International High Yield Index Fund ETF offers about 4.9% in dividends. This yield fluctuates as new enterprises replace old ones. Income investors won't be trapped with companies that cut dividends, which is good news.
Another benefit of this Vanguard ETF is diversification. It has 1,324 stocks. A few laggards won't affect your portfolio drastically. There have been more winners than losers in the ETF. That's shown by its 8.31% lifetime average annual return. Fund returns over 14.5% during the past year.
The Vanguard International High Yield Index Fund ETF may continue to pay dividends and appreciate in value. The average price-to-earnings multiple of its stocks is 10.2. No need to fret about sky-high values causing dramatic pullbacks. The ETF's portfolio seems good too. The average annual profits growth rate of Vanguard stocks is 11.1%. Also, the ETF doesn't include high-risk startups. The median market cap of its stocks is $45.9 billion.
A few reminders Every investment has drawbacks. The Vanguard International High Yield Index Fund ETF follows suit. It costs more than other Vanguard ETFs. This fund's annual cost ratio is 0.22%. This isn't terrible considering similar funds have an average cost ratio of 0.97%.
The history of this ETF is short. February 2016 saw its creation. Thus, average returns since commencement may not reflect historical performance as well as more established Vanguard funds. In particular, the ETF's focus on international stocks increases risk. This is especially true since 21.6% of the fund invested in emerging market companies.
Despite these drawbacks, the Vanguard High Yield Index Fund ETF makes passive income straightforward. It may appeal to income investors prepared to take on more risk for a higher payout.
stay turned for development